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Inflation Reduction Act and Medicare Beneficiaries

Retirement Daily on The Street 10/4/2022 Mer Brown
© Provided by Retirement Daily on The Street

The Inflation Reduction Act will positively affect Medicare benefits. Here's what to expect in the next few years.

The Inflation Reduction Act, which was signed into law on Aug. 16, 2022, is designed to help seniors and retirees pay for Medicare costs that have gone up in recent months due to inflation. One of the major things to have come from the Inflation Reduction Act is the expanded Medicare benefits that will be coming within the next few years.

One major development in the expansion of Medicare is that vaccines—including those for COVID-19, shingles, and monkeypox—will be zero dollars in 2023, according to Jae Oh, author of Maximize Your Medicare. And, “We have a diabetes epidemic in addition to COVID,” Oh said. “Insulin will be capped at $35 as far as a copay goes.”

Another important factor, Oh said, is that after consumers meet the catastrophic stage, out-of-pocket costs for Part D and prescription drugs under Medicare Advantage plans will be zero. Additionally, there will be a limit of $2000 that people will have to pay out of pocket for Part D and prescription drugs. These factors will be implemented in 2024 and 2025 respectively.

Oh said that with the Inflation Reduction Act, any price increases on medications are going to be limited to the rate of inflation. “The reality is that the difference is going to be going to the Medicare system, not to the Medicare beneficiary,” he said. “This one is going to be a little bit more difficult to identify with respect to whether or not that's going to save you much money.”

A part of the recently-signed act that has been in the news lately is the notion that Medicare will now be negotiating for drug prices. Although it is a notable point, Oh said that the details around it are still unknown because it won’t occur until 2026. He also said that pharmaceutical companies are pushing back against this by filing legal action. Because of this, it is likely that there will be changes to the negotiation of drug prices. Oh said that there is sure to be more details about this new law soon, especially during open enrollment season where people are willing to adjust either their Part D plans or Medicare Advantage plans.

Make sure to check out our article, Medicare Drug Price Reforms Kick Off In 2023, which goes into more depth about the Inflation Reduction Act and its impact.

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