Vast Changes to Medicare Part D Plans in 2023
Medicare beneficiaries can rejoice for the first time; there will now be a cap on their out-of-pocket costs for prescriptions each year. This brand-new provision is part of the Inflation Reduction Act of 2022, including limits to out-of-pocket insulin payments and making vital vaccines accessible. 1.3 million people spent over $2K in 2020 without this protection based on Part D plans – highlighting how critical these changes are going forward! Plus, all will roll out gradually via staggered implementation as with many other parts of this law – so keep an eye open if you’re eligible soon enough!
In 2024, Medicare beneficiaries will no longer have any out-of-pocket costs once they enter what Medicare calls catastrophic coverage. The way catastrophic coverage worked in 2022 is that once an enrollee’s out-of-pocket costs reached $7,050, they must pay 5 percent of their prescription drug costs, with no limit. But beginning in 2024, that 5 percent coinsurance requirement will be gone, and enrollees won’t have to pay anything for their prescription drugs for the rest of the year.
Beginning in 2025, Part D prescription drug out-of-pocket costs will be capped at $2,000 annually. This applies to stand-alone plans with original Medicare or private Medicare Advantage plans, which also cover prescription drugs. It should be noted that this cap may change over time due to inflation and other factors affecting the healthcare industry landscape. These cost savings are expected to begin rolling out gradually until then so beneficiaries can start planning for their future healthcare needs accordingly!
Also, in 2025, Medicare drug plans are introducing a new feature to alleviate the burden of large drug bills. Smoothed cost-sharing allows enrollees to spread out their out-of-pocket costs over an entire year and protect those who may have difficulty covering one lump sum payment for medication expenses.
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