Navigating Prescription Drug Savings with Medicare in 2024

The landscape of Medicare prescription drug costs is undergoing a significant transformation in 2024, largely due to the Inflation Reduction Act, which was signed into law by President Biden in 2022.

While the act is renowned for its substantial investment in climate and energy, its provisions for Medicare Part D plans may be more profound. But a recent survey by the nonprofit KFF found that most Americans don’t even know about them.

Who Should Read This Blog Post

You should read this post if you are currently a Medicare beneficiary, soon to be a Medicare beneficiary, or if you are assisting a loved one or family member in navigating the Medicare system.

The information in this blog can help you understand the recent changes to Medicare prescription drug costs and how you can save money on your  medications. You will learn about:

• The impact of the Inflation Reduction Act on Medicare Part D plans
• Savings on insulin products
• Changes to vaccine coverage under the IRA
• Increased financial assistance for low-income seniors
• How Medicare’s newfound bargaining power may save significant amounts on medication costs, as well as the ten medications currently up for price negotiation.
  

Background: What is Medicare Part D?

Medicare Part D is an insurance program that uses private medical insurance plans to help Medicare beneficiaries pay for prescription drugs.

It is available to people who have Medicare Part A and Part B, or who are enrolled in a Medicare Advantage plan that doesn’t include prescription drug coverage.

There are two ways to get Part D coverage: through a stand-alone Part D plan or through a Medicare Advantage plan that includes prescription drug coverage.

Note: Neither MediGap plans nor the popular Medi-Share 65+ health sharing plan include prescription drug coverage. If you need prescription drug insurance you will need to purchase a Part D plan. However, Medi-Share 65+ enrollees also have access to an excellent discount program for generic drugs.

It is important to purchase a Part D plan as soon as you are eligible for Medicare and enroll in Part B to avoid late enrollment penalties. Late enrollment penalties can be costly and can add up over time.

Learn More About the Medi-Share 65+ Health Sharing Plan

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The Inflation Reduction Act’s Impact on Medicare Part D

The IRA has ushered in pivotal changes for Medicare enrollees, particularly affecting those with Part D plans.

Initially, the Act introduced a $35 monthly cap on insulin costs and provided free vaccines for Medicare beneficiaries. These provisions are discussed in detail below.

This year, a more substantial shift is taking place with the implementation of an annual out-of-pocket spending cap of $3,300.

This cap is a game-changer for beneficiaries, as it removes the burden of paying 5% of the costs for brand-name drugs beyond this spending threshold.

The Inflation Reduction Act doesn’t stop there. It also introduces measures to keep drug prices in check by penalizing pharmaceutical companies if they raise drug prices faster than the general inflation rate.

This provision aims to make medications more affordable for seniors. Furthermore, the . broadens eligibility for financial assistance with Part D costs, extending a helping hand to low-income seniors.

“Cancer patients — the majority of whom are on Medicare — can face annual out-of-pocket costs of more than $16,500. Far too many are forced to choose between filling their prescription and bearing significant financial hardship, or abandoning the prescription and experiencing worsening health or even death,” said David Mitchell, a patient with incurable blood cancer whose drugs carry a list price of more than $900,000 per year and founder of Patients For Affordable Drugs.

“The historic Inflation Reduction Act includes policies that will bring needed relief to millions of patients, especially older Americans with cancer. We’ve been waiting for this relief for far too long,” he said.

Savings on Insulin Products

Medicare Advantage plans will now offer many common insulin products at a monthly copayment of $35 or less.

This is a significant reduction from the previous cost of insulin, which could be hundreds of dollars per month.

The specific insulin products that are under the cap and the manufacturers that produce them are as follows:

• Lilly: Humalog, Lispro, and Basaglar
• Novo Nordisk: Novolog, Levemir, and Tresiba
• Sanofi: Toujeo and Apidra

Under the new law, Medicare patients out-of-pocket costs per insulin product per month are also limited to $35.

Learn More: Medicare And Diabetes: What You Need to Know

Vaccine Coverage Under the IRA

The act significantly enhances vaccine coverage under Part D by eliminating cost-sharing for all covered vaccines.

All Medicare Part D plans will now be required to cover all vaccines at zero out-of-pocket cost for beneficiaries.

This will make it easier for you to access the vaccines you need to stay healthy, and to hopefully help reduce the spread of contagious viruses.

This is a nice benefit, especially considering the previously high out-of-pocket costs associated with certain vaccines, such as the shingles vaccine, which cost patients an average of $77 in 2021.

Other changes to vaccine coverage under the IRA. include:

• Expansion of the list of covered vaccines to include additional types of vaccines, such as those for the flu and pneumonia.
• Increased frequency of coverage for certain vaccines, such as the flu vaccine, which will now be covered once per year instead of once every two years.
• Streamlining the process for obtaining coverage for vaccines, making it easier to get the vaccines you need.

What To Do If You Can’t Afford Medicare Part D

If you are struggling to afford your Medicare Part D costs, there are a few things you can do.

First, make sure that you are enrolled in the correct plan.

There are many different Medicare Part D plans available, and some plans may be more affordable than others.

Second, make sure that you are taking advantage of all of the available discounts and assistance programs.

There are a number of programs that can help you save money on your prescription drugs, such as LIS, MSP, and other state and local programs.

Third, talk to your doctor about your prescription drug needs. Your doctor may be able to prescribe you less expensive drugs or refer you to a program that can help you get the drugs you need at a lower cost.

Expanded Financial Assistance Programs for Low-Income Seniors

Another effect of the IRA. is greatly expanded eligibility for lower-income seniors for financial assistance with Part D costs.

This assistance may help you afford the cost of your medications and other health care needs.

The Inflation Reduction Act (.) made significant changes to Medicare Part D, including expanding financial assistance for low-income seniors.

There are several programs that provide financial assistance for Medicare Part D costs. The two main programs are:

• Medicare Part D Low-Income Subsidy (LIS)
• Medicare Savings Program (MSP)

The Extra Help program is worth about $5,300 per year for people who enroll in it, according to the Social Security Administration.

The Medicare Part D Low-Income Subsidy Program (LIS)

To qualify for LIS, you must have limited income and resources. The specific eligibility criteria for LIS are:

• Your annual income must be below $21,870 if you are single, or $29,580 if you are married filing jointly.
• You cannot have more than $10,000 in assets (excluding your home and car).

If you qualify for LIS, you will receive help with your Part D premiums, deductibles, copayments, and other out-of-pocket costs. The amount of help you receive will depend on your income and your drug costs.

The Medicare Savings Program (MSP)

The Medicare Savings Program is a program that helps people with Medicare pay for their health care costs.

There are two types of MSP:

• The Qualified Medicare Beneficiary (QMB) program
• The Specified Low-Income Medicare Beneficiary (SLMB) program

To qualify for QMB or SLMB, you must have limited income and resources. The specific eligibility criteria for QMB and SLMB are:

• For QMB, your annual income must be below $19,370 if you are single, or $26,570 if you are married filing jointly.
• For SLMB, your annual income must be below $25,750 if you are single, or $34,050 if you are married filing jointly.

If you qualify for QMB or SLMB, you will receive help with your Medicare Part A and Part B premiums, as well as some of your out-of-pocket costs. The amount of help you receive will depend on your income and your drug costs.

In addition to LIS and MSP, there are other programs that may offer financial assistance for Medicare Part D costs. These programs include:

• The Veterans Administration (VA)
• The Indian Health Service (IHS)
• Some state and local programs

If you are eligible for any of these programs, you may be able to get help with your Medicare Part D costs. To find out if you qualify for any of these programs, you can contact your local Social Security office or your Medicare plan.

Medicare Can Now Negotiate Directly With Drug Makers

A groundbreaking provision of the IRA is the authorization for Medicare to negotiate drug prices directly with pharmaceutical companies.

The goal of this program is to lower drug prices for Medicare beneficiaries.

Before the IRA. was passed, drug manufacturers were free to set their prices however they wanted. This led to high drug prices that were unaffordable for many Medicare beneficiaries.

The IRA. gives Medicare the power to negotiate drug prices directly with pharmaceutical companies.

This means that Medicare can now work to lower drug prices for its beneficiaries.

There are a few ways in which Medicare can negotiate drug prices:

One way is through direct negotiation. Medicare can directly negotiate with pharmaceutical companies to lower the price of their drugs.

Another way is through competitive bidding: Medicare can hold competitive bidding processes for drugs. In these processes, pharmaceutical companies compete to offer the lowest price for their drugs. Medicare will then choose the drug with the lowest price, manufactured to acceptable quality and safety standards.

What Drugs Will be Affected?

The specific manufacturers and drugs in the first 10 essential drugs that Medicare will negotiate prices for are as follows:

The Drug Price Transparency Database

Additionally, the IRA directs the federal government to create and maintain a drug price transparency database. This database will provide information on drug prices, including the list price, the negotiated price, and the amount of money that Medicare pays for the drug.

This information will help to make drug prices more transparent and make it much easier for consumers to compare drug prices on their own.

The Chief Medical Officer for Medicare

The IRA directs the creation of an Office of the Chief Medical Officer for Medicare.

This office will be responsible for developing policies to lower drug prices. The office will also be responsible for monitoring the impact of the . on drug prices.

The IRA is a significant step forward in the effort to lower drug prices for Medicare beneficiaries, say supporters. These provisions will help to make drug prices more transparent and will allow consumers to compare drug prices.

Looking Ahead: Changes in 2025

The year 2025 will bring two more critical changes.

First, Medicare Part D Beneficiaries will see a cap on their total out-of-pocket spending at $2,000.

Second, Part D beneficiaries have an option to spread out-of-pocket costs throughout the year, rather than paying a deductible or copay all at once when you pick up your medications.

This is accomplished via a monthly payment plan with Part D insurance companies.

These upcoming changes stand to provide substantial financial relief for those who require high-cost drugs for chronic conditions.

Case Study: How a Medicare Beneficiary May Save Money in 2024

John is a 65-year-old man on a limited income who is taking an expensive cancer medication.

He is struggling to afford his medications, and he is worried about how he will be able to pay for them in the future.

However, thanks to the recent passage of the Inflation Reduction Act and its expansion of low-income subsidies,John is now eligible for the Medicare Part D Low-Income Subsidy (LIS). 

The LIS can help John save money on his prescription drugs by reducing his out-of-pocket costs. 

John also qualifies for the Medicare Savings Program (MSP). The MSP can help John pay for his Medicare premiums and other out-of-pocket costs.

Here are some specific examples of how the IRA can help John save money on his prescription drugs:

• John’s monthly prescription drug costs are $1,000. With the LIS, he will pay no more than $250 per month for his drugs.

• John’s Medicare Part B premium is $175 per month. With the MSP, he will have his premium paid for in full.

• John also has a deductible of $2,000. With the MSP, he will only have to pay $200 of his deductible.

The Inflation Reduction Act’s Impact on Medicare Part D

The IRA has ushered in pivotal changes for Medicare enrollees, particularly affecting those with Part D plans.

Initially, the Act introduced a $35 monthly cap on insulin costs and provided free vaccines for Medicare beneficiaries. These provisions are discussed in detail below.

This year, a more substantial shift is taking place with the implementation of an annual out-of-pocket spending cap of $3,300.

This cap is a game-changer for beneficiaries, as it removes the burden of paying 5% of the costs for brand-name drugs beyond this spending threshold.

The Inflation Reduction Act doesn’t stop there. It also introduces measures to keep drug prices in check by penalizing pharmaceutical companies if they raise drug prices faster than the general inflation rate.

This provision aims to make medications more affordable for seniors. Furthermore, the . broadens eligibility for financial assistance with Part D costs, extending a helping hand to low-income seniors.

“Cancer patients — the majority of whom are on Medicare — can face annual out-of-pocket costs of more than $16,500. Far too many are forced to choose between filling their prescription and bearing significant financial hardship, or abandoning the prescription and experiencing worsening health or even death,” said David Mitchell, a patient with incurable blood cancer whose drugs carry a list price of more than $900,000 per year and founder of Patients For Affordable Drugs.

“The historic Inflation Reduction Act includes policies that will bring needed relief to millions of patients, especially older Americans with cancer. We’ve been waiting for this relief for far too long,” he said.

Savings on Insulin Products

Medicare Advantage plans will now offer many common insulin products at a monthly copayment of $35 or less.

This is a significant reduction from the previous cost of insulin, which could be hundreds of dollars per month.

The specific insulin products that are under the cap and the manufacturers that produce them are as follows:

• Lilly: Humalog, Lispro, and Basaglar
• Novo Nordisk: Novolog, Levemir, and Tresiba
• Sanofi: Toujeo and Apidra

Under the new law, Medicare patients out-of-pocket costs per insulin product per month are also limited to $35.

Learn More: Medicare And Diabetes: What You Need to Know

Vaccine Coverage Under the IRA

The act significantly enhances vaccine coverage under Part D by eliminating cost-sharing for all covered vaccines.

All Medicare Part D plans will now be required to cover all vaccines at zero out-of-pocket cost for beneficiaries.

This will make it easier for you to access the vaccines you need to stay healthy, and to hopefully help reduce the spread of contagious viruses.

This is a nice benefit, especially considering the previously high out-of-pocket costs associated with certain vaccines, such as the shingles vaccine, which cost patients an average of $77 in 2021.

Other changes to vaccine coverage under the IRA. include:

• Expansion of the list of covered vaccines to include additional types of vaccines, such as those for the flu and pneumonia.
• Increased frequency of coverage for certain vaccines, such as the flu vaccine, which will now be covered once per year instead of once every two years.
• Streamlining the process for obtaining coverage for vaccines, making it easier to get the vaccines you need.

What To Do If You Can’t Afford Medicare Part D

If you are struggling to afford your Medicare Part D costs, there are a few things you can do.

First, make sure that you are enrolled in the correct plan.

There are many different Medicare Part D plans available, and some plans may be more affordable than others.

Second, make sure that you are taking advantage of all of the available discounts and assistance programs.

There are a number of programs that can help you save money on your prescription drugs, such as LIS, MSP, and other state and local programs.

Third, talk to your doctor about your prescription drug needs. Your doctor may be able to prescribe you less expensive drugs or refer you to a program that can help you get the drugs you need at a lower cost.

Expanded Financial Assistance Programs for Low-Income Seniors

Another effect of the IRA. is greatly expanded eligibility for lower-income seniors for financial assistance with Part D costs.

This assistance may help you afford the cost of your medications and other health care needs.

The Inflation Reduction Act (.) made significant changes to Medicare Part D, including expanding financial assistance for low-income seniors.

There are several programs that provide financial assistance for Medicare Part D costs. The two main programs are:

• Medicare Part D Low-Income Subsidy (LIS)
• Medicare Savings Program (MSP)

The Extra Help program is worth about $5,300 per year for people who enroll in it, according to the Social Security Administration.

The Medicare Part D Low-Income Subsidy Program (LIS)

To qualify for LIS, you must have limited income and resources. The specific eligibility criteria for LIS are:

• Your annual income must be below $21,870 if you are single, or $29,580 if you are married filing jointly.
• You cannot have more than $10,000 in assets (excluding your home and car).

If you qualify for LIS, you will receive help with your Part D premiums, deductibles, copayments, and other out-of-pocket costs. The amount of help you receive will depend on your income and your drug costs.

The Medicare Savings Program (MSP)

The Medicare Savings Program is a program that helps people with Medicare pay for their health care costs.

There are two types of MSP:

• The Qualified Medicare Beneficiary (QMB) program
• The Specified Low-Income Medicare Beneficiary (SLMB) program

To qualify for QMB or SLMB, you must have limited income and resources. The specific eligibility criteria for QMB and SLMB are:

• For QMB, your annual income must be below $19,370 if you are single, or $26,570 if you are married filing jointly.
• For SLMB, your annual income must be below $25,750 if you are single, or $34,050 if you are married filing jointly.

If you qualify for QMB or SLMB, you will receive help with your Medicare Part A and Part B premiums, as well as some of your out-of-pocket costs. The amount of help you receive will depend on your income and your drug costs.

In addition to LIS and MSP, there are other programs that may offer financial assistance for Medicare Part D costs. These programs include:

• The Veterans Administration (VA)
• The Indian Health Service (IHS)
• Some state and local programs

If you are eligible for any of these programs, you may be able to get help with your Medicare Part D costs. To find out if you qualify for any of these programs, you can contact your local Social Security office or your Medicare plan.

Medicare Can Now Negotiate Directly With Drug Makers

A groundbreaking provision of the IRA is the authorization for Medicare to negotiate drug prices directly with pharmaceutical companies.

The goal of this program is to lower drug prices for Medicare beneficiaries.

Before the IRA. was passed, drug manufacturers were free to set their prices however they wanted. This led to high drug prices that were unaffordable for many Medicare beneficiaries.

The IRA. gives Medicare the power to negotiate drug prices directly with pharmaceutical companies.

This means that Medicare can now work to lower drug prices for its beneficiaries.

There are a few ways in which Medicare can negotiate drug prices:

One way is through direct negotiation. Medicare can directly negotiate with pharmaceutical companies to lower the price of their drugs.

Another way is through competitive bidding: Medicare can hold competitive bidding processes for drugs. In these processes, pharmaceutical companies compete to offer the lowest price for their drugs. Medicare will then choose the drug with the lowest price, manufactured to acceptable quality and safety standards.

What Drugs Will be Affected?

The specific manufacturers and drugs in the first 10 essential drugs that Medicare will negotiate prices for are as follows:

The Drug Price Transparency Database

Additionally, the IRA directs the federal government to create and maintain a drug price transparency database. This database will provide information on drug prices, including the list price, the negotiated price, and the amount of money that Medicare pays for the drug.

This information will help to make drug prices more transparent and make it much easier for consumers to compare drug prices on their own.

The Chief Medical Officer for Medicare

The IRA directs the creation of an Office of the Chief Medical Officer for Medicare.

This office will be responsible for developing policies to lower drug prices. The office will also be responsible for monitoring the impact of the . on drug prices.

The IRA is a significant step forward in the effort to lower drug prices for Medicare beneficiaries, say supporters. These provisions will help to make drug prices more transparent and will allow consumers to compare drug prices.

Looking Ahead: Changes in 2025

The year 2025 will bring two more critical changes.

First, Medicare Part D Beneficiaries will see a cap on their total out-of-pocket spending at $2,000.

Second, Part D beneficiaries have an option to spread out-of-pocket costs throughout the year, rather than paying a deductible or copay all at once when you pick up your medications.

This is accomplished via a monthly payment plan with Part D insurance companies.

These upcoming changes stand to provide substantial financial relief for those who require high-cost drugs for chronic conditions.

Case Study: How a Medicare Beneficiary May Save Money in 2024

John is a 65-year-old man on a limited income who is taking an expensive cancer medication.

He is struggling to afford his medications, and he is worried about how he will be able to pay for them in the future.

However, thanks to the recent passage of the Inflation Reduction Act and its expansion of low-income subsidies,John is now eligible for the Medicare Part D Low-Income Subsidy (LIS). 

The LIS can help John save money on his prescription drugs by reducing his out-of-pocket costs. 

John also qualifies for the Medicare Savings Program (MSP). The MSP can help John pay for his Medicare premiums and other out-of-pocket costs.

Here are some specific examples of how the IRA can help John save money on his prescription drugs:

• John’s monthly prescription drug costs are $1,000. With the LIS, he will pay no more than $250 per month for his drugs.
• John’s Medicare Part B premium is $175 per month. With the MSP, he will have his premium paid for in full.
• John also has a deductible of $2,000. With the MSP, he will only have to pay $200 of his deductible.

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Conclusion

The Inflation Reduction Act represents a significant milestone in the evolution of Medicare, introducing key changes to Part D that promise considerable savings for beneficiaries.

While Medicare costs, including Part B premiums and Part D premiums, are on the rise, the enhanced protections under the . offer significant relief, especially for those with the highest drug costs.

The expansion of the Extra Help program and Medicare Savings Programs further supports low-income seniors, making essential medications more accessible.

As these provisions unfold, understanding and utilizing them can lead to meaningful financial relief for seniors grappling with the high costs of prescription drugs.

Get Help

The changes to Medicare and prescription drug savings can be complex to navigate.

For personalized advice and to ensure you’re fully leveraging the new Medicare provisions, consider reaching out to a Personal Benefits Manager. Their expertise can provide clarity and help you optimize your benefits under the evolving Medicare landscape.

Consultations are always free. And we can save you a lot of time and money by helping you research your options and ensuring you enroll in a plan that provides the financial protection you need.

For Further Reading: How To Choose a Medicare Part D Plan|How People on Medicare Can Protect Themselves Against the Financial Risk of Cancer