If you are among the more than 49 million Americans enrolled in Medicare Part D, you may feel overwhelmed by the costs of your prescription drugs from one year to the next. Proposed legislation currently awaiting review by the Senate could bring you some relief in the form of significant savings.
Steady increases in prescription drug costs over time has been a growing concern for many Americans who rely on medication. In fact, one in five seniors on Medicare report having skipped their medications due to cost, according to one recent survey. Meanwhile, individuals with such serious health conditions as hepatitis C or certain cancers, for instance, often depend on an array of brand-name, specialty drugs that can easily total thousands of dollars.
Provisions in the bill, known as the Inflation Reduction Act of 2022, would, in part, empower the federal government to negotiate costs for some of the most expensive prescription medications.
What will that mean for Medicare Part D beneficiaries? Here is a look at the potential benefits, should the bill pass:
- For the first time, seniors would pay no more than $2,000 per year for their prescription medication.
- Medicare beneficiaries who have spent more than $7,050 out of pocket on covered medications have had to pay a 5 percent co-pay; this required coinsurance would be eliminated.
- Vaccines would be free for Medicare beneficiaries starting in 2023.
- In addition, drug companies that raise the prices of their drugs faster than the rate of inflation would be subject to financial penalties. From 2019 to 2020, half of all drugs covered by Medicare had price increases above the rate of inflation over that period.
In addition to the proposed reforms on Medicare drug pricing, the plan also includes provisions on climate change, corporate taxes, and energy. If the bill becomes law, negotiations on drug pricing would start in 2026. The potential savings you would experience would vary depending on the type of medications you take. Decisions have yet to be made regarding the specific prescription drugs for which prices would be negotiated. The Senate is expected to vote before the end of August 2022.