Official reports or updates from the Centers for Medicare & Medicaid Services (CMS)

Medicare Part D Caps Out-of-Pocket Drug Costs at $2,000 for 19 Million, Saving $400 Each Under Inflation Reduction Act

Dec 31, 2024, 06:30 PM

Starting January 1, 2025, Medicare Part D beneficiaries will have their out-of-pocket prescription drug costs capped at $2,000 annually, a provision of the Inflation Reduction Act. This cap is expected to benefit an estimated 19 million seniors and people with disabilities, saving them an average of $400 per year. The new limit is part of broader efforts to reduce prescription drug costs, which also include a $35 monthly cap on insulin prescriptions and allowing Medicare to negotiate drug prices. Prior to this law, there was no cap on out-of-pocket costs for Medicare Part D enrollees, who were responsible for 5% of drug costs in the catastrophic coverage phase. The change is anticipated to provide significant relief to those with high medication expenses.