Senators press Administration to provide more information to older adults about out-of-pocket prescription drug cost cap that goes into effect January 2025
The $2,000 cap on out-of-pocket prescription drugs for Medicare recipients to save seniors $1.5 billion in copays and other expenses
Casey and Warnock fought to pass law giving Medicare the power to negotiate and lower prescription drugs
Senators: “The new cap will allow nearly 19 million Medicare beneficiaries to reduce their spending on prescription drugs. We must do more to ensure that older adults understand these new options and benefits.”
Washington, D.C. – Today, U.S. Senators Bob Casey (D-PA), Chairman of the U.S. Senate Special Committee on Aging, and Reverend Raphael Warnock (D-GA) pressed the Biden Administration to take action to inform seniors of the steps they may need to take to benefit from the impending cap on out-of-pocket prescription drug prices. Starting in January 2025, as a result of the landmark Inflation Reduction Act, a $2,000 cap on out-of-pocket drug costs for Medicare Part D beneficiaries will go into effect and reduce drug costs for nearly 19 million Americans. The Senators are urging the Department of Health and Human Services (HHS) to increase outreach efforts to ensure that seniors understand how to guarantee their prescription drugs count towards the out-of-pocket cap so they don’t end up paying more than expected.
“The new cap will allow nearly 19 million Medicare beneficiaries to reduce their spending on prescription drugs. We must do more to ensure that older adults understand these new options and benefits. A lack of information and communication could leave older adults paying more and missing out on benefits to which they are entitled,” wrote the Senators.
Chairman Casey and Senator Reverend Warnock have long led efforts in the Senate to lower prescription drug costs. In 2022, they fought to pass the Inflation Reduction Act, which put in place the $2,000 cap on out-of-pocket prescription drug costs for Medicare Part D beneficiaries. The law also capped the cost of insulin at $35 a month for Medicare recipients and gave Medicare the power to negotiate prescription drug prices for the first time. Negotiations began last year on the first set of ten drugs: Eliquis, Jardiance, Xarelto, Januvia, Farxiga, Entresto, Enbrel, Imbruvica, Stelara, and NovoLog/Fiasp. In August, the Biden Administration announced the new, lower negotiated prices for each of these first ten drugs. Early next year, the Administration will announce the next set of 15 drugs that will be subject to price negotiations.
Earlier this year, Casey and Warnock introduced the Capping Prescription Costs Act, which would expand the savings of the Inflation Reduction Act by capping out-of-pocket prescription drug costs at $2,000 for individuals and $4,000 for families on private insurance.
Read the full letter HERE or below:
Dear Secretary Becerra:
Thank you for your ongoing commitment to lowering the cost of health care across the Nation. In just a few months, as a result of the Inflation Reduction Act (IRA), a $2,000 cap on out-of-pocket prescription drug costs will go into effect. The new cap will allow nearly 19 million Medicare beneficiaries to reduce their spending on prescription drugs. We must do more to ensure that older adults understand their new options and benefits. A lack of information and communication could leave older adults paying more and missing out on benefits to which they are entitled. As this and other prescription drug pricing provisions from the IRA take effect, we urge the Department of Health and Human Services (HHS) to increase outreach efforts to older adults to ensure they are aware of how to benefit from the law.
When Congress passed the IRA, we fought to ensure the legislation included significant steps to improve prescription drug affordability by allowing Medicare to negotiate drug prices, capping out of pocket costs for Medicare beneficiaries, lowering insulin costs, and decreasing prescription drug costs for low-income Medicare beneficiaries. Last year, the Centers for Medicare & Medicaid Services (CMS) began to negotiate with pharmaceutical companies to lower the price of prescription drugs and in August, CMS announced the negotiated maximum fair prices for the first 10 drugs under the IRA’s negotiation program. Medicare enrollees taking these 10 drugs paid a total of $3.4 billion in out-of-pocket costs in 2022. Had the IRA been in effect in 2023, Medicare would have saved $6 billion, and beneficiaries would have saved $1.5 billion in copays and other expenses. Additional drugs will be negotiated each year under this program, largely expanding the affordability of prescription drugs for Medicare beneficiaries.
Starting in 2023, cost-sharing was eliminated for vaccines covered by Medicare Part D. According to HHS, 10.3 million Medicare Part D enrollees received a recommended vaccine free of charge, which saved beneficiaries more than $400 million in out-of-pocket costs. This includes 3.9 million older adults who received a shingles vaccine, which is an increase of about 42 percent from 2021.
In January 2024, the IRA also capped out of pocket costs for insulin at $35 per month for Medicare beneficiaries enrolled in Part B and Part D. Had the IRA been in effect in 2020, 1.5 million Medicare beneficiaries would have benefited, saving about $734 million in Part D and $27 million in Part B, or about $500 in average annual savings per beneficiary. Thanks to pressure from the IRA, three of the largest U.S. insulin manufacturers have capped out-of-pocket insulin costs for even more patients.
In January 2025, Medicare Part D enrollees will benefit from a $2,000 cap on out-of-pocket drug costs. This redesign will reduce beneficiary out-of-pocket spending by about $7.4 billion each year among more than 18.7 million enrollees in 2025. This will save nearly $400 per person in out of pocket costs each year.
CMS has provided some information about the upcoming implementation of the out-of-pocket cap, with detailed guidance regarding the Medicare Prescription Payment Plan to Part D plan sponsors and a fact sheet for consumers and Medicare beneficiaries. But CMS must do more to inform older adults about the details of the $2,000 out of pocket cap to ensure they are able to realize its maximum benefits. For example, Medicare beneficiaries need information about how to guarantee their prescription drugs count towards the out-of-pocket cap and how to choose the best Part D plan for their individual needs. Without this critical information, beneficiaries may end up paying more than expected.
The IRA directly lowers prescription drug costs for millions of Americans, and we must do everything we can provide older adults with the resources to understand these benefits. This is especially important with Open Enrollment beginning on October 15, a key opportunity for beneficiaries to ensure their health plans meet their needs. The Biden-Harris Administration has worked tirelessly to pass and implement the IRA, and we look forward to continuing those efforts as provisions of the law take effect, making prescription drugs costs more affordable.
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