Big Changes Coming to Medicare That Every Beneficiary Should Know

The Inflation Reduction Act (IRA) is an important piece of legislation that will have a significant impact on Medicare Part D beneficiaries beginning in 2023. The most notable changes include free shingles vaccines starting January 1, 2023, a new $2,000 out-of-pocket maximum in 2025, and a “smoothed” cost sharing option to even out drug costs over the course of the year for Medicare Part D beneficiaries, allowing them to better budget for their essential medications.

According to the Inflation Reduction Act: CMS Implementation Timeline there are several changes that will take place over the next few years, including caps on how much pharmaceutical companies can charge for certain drugs, and a reduction in the cost of generic drugs. The timeline also outlines how the IRS will update and adjust these changes annually. It’s important to stay informed and up to date with these changes, so be sure to check back regularly and download the “Inflation Reduction Act: CMS Implementation Timeline” sheet for reference.

As a Medicare beneficiary, it’s important to stay up to date on the changes to your health insurance coverage. Here are some of the most important changes coming to Medicare that you should know about:

It’s great to see the Medicare Part D program making progress in helping to improve access to prescription drugs and reduce costs for beneficiaries. The two notable changes coming to Part D in 2023, such as the no-cost adult vaccines recommended by ACIP, including the shingles vaccine, and the $35 cap on monthly supplies of insulin are especially encouraging. Not only will this make it easier for people to access the medications they need at a more affordable price, but it will also help to alleviate some of the burden on those with chronic conditions. The addition of the Drug Price Negotiation Program is also an exciting development, and we look forward to seeing the results of these changes in the coming years.

Starting in 2024, Medicare Part D will be seeing several notable changes that will benefit those with prescription drug coverage. On January 1, 2024, those in the catastrophic phase of the prescription drug benefit will be exempt from paying coinsurance or co-payments. Additionally, the average premium across most Part D plans will be limited to 6% above the previous year’s premium. This protection will last until 2029, with a mechanism to stabilize premiums in 2030 and beyond. Finally, by September 1, CMS will publish maximum fair prices for the first 10 drugs selected for negotiation, with those prices going into effect in 2026.

Starting in 2025, people with Medicare Part D will be able to benefit from the new smoothed cost sharing payment option, and the Manufacturer Discount Program for Medicare Part D. Additionally, they won’t have to pay more than $2,000 out-of-pocket for prescription drugs. This is an incredibly positive development for people who require prescription drugs and are struggling to afford them. The smoothed cost sharing payment option will help individuals spread out their out-of-pocket Part D costs over the course of the year, while the Manufacturer Discount Program will allow them to access discounts on applicable drugs. This will be a huge help to many individuals and their families who require prescription drugs and are struggling to cover their healthcare costs.

Another big change happening in 2025 is the government reinsurance in the catastrophic phase of Part D will decrease from 80% to 20% for brand-name drugs, biologicals, and biosimilars and will decrease from 80% to 40% for generics. Finally, By February 1, 2025, CMS will announce 15 more Medicare Part D drugs for negotiation. By November 30, CMS will publish the maximum fair prices for the 15 Medicare Part D drugs selected for negotiation earlier in the year. Maximum fair prices for these drugs will go into effect in 2027.