Medicare Drug Costs Capped at $2,000 Annually Starting January 1, 2025, Benefiting 19 Million with $400 Savings

Jan 2, 2025, 06:03 PM

A key provision of the Inflation Reduction Act, which limits annual out-of-pocket spending on prescription drugs to $2,000 for Medicare beneficiaries, went into effect on January 1, 2025. This measure is expected to benefit millions of seniors, with an estimated 19 million people saving an average of $400 each. The cap applies to drugs purchased at the pharmacy or through mail order, marking a significant change from previous years where no such cap existed for Medicare Part D enrollees. The Inflation Reduction Act, passed by Democrats, also includes other measures aimed at reducing drug costs, such as a $35 monthly cap on insulin prescriptions and allowing Medicare to negotiate drug prices.