Inflation Reduction Act bringing changes to Medicare Part D

        On Aug. 16, 2022, President Biden signed into law The Inflation Reduction Act (IRA) of 2022. This law has various phases which are intended to reduce the costs of prescription drugs for Medicare Beneficiaries through 2029. The 2023 and 2024 changes that have been implemented include: $35 per month copay limit for insulin (as long as covered on the Medicare Plan Sponsor's formulary); improved coverage for vaccines; eliminated cost-sharing in the catastrophic coverage phase, expanded eligibility for Part D Low Income Subsidy or “Extra Help” and limitation of Medicare Part D plan premium growth to no more that 6% per year.
        In 2025, the IRA changes are expected to have a greater impact on Medicare beneficiaries since the 2006 inception of Medicare Part D. The “donut hole” will be eliminated and the out-of-pocket maximum for Medicare Plan Sponsor covered prescription drugs will be capped at $2,000. Part D costs will shift from Medicare and the drug manufacturers to the Part D Plan Sponsors.
        This change is expected to result in increased plan premiums, reductions in a Medicare Plan Sponsor’s formulary list (covered medications), tiering modifications along with disruption in pharmacy networks. In addition, Part D Plan Sponsors must also offer their members the option to opt-in to a Medicare Prescription Payment Plan (M3P). Through this new program, your expected annual prescription drug costs will be split out in smaller monthly payments payable through the M3P instead of at the pharmacy counter.
        The Medicare Annual Enrollment Period is Oct. 15-Dec. 7, with an effective date of Jan. 1. During this period, a Medicare beneficiary can change their Part D plan, change their Part C Plan (Medicare Advantage-MAPD) or return to Original Medicare and enroll in a Part D stand-alone drug plan.
        The IRA is a federal law and Medicare beneficiaries need to prepare for any changes that could impact how services and medications are obtained. Medicare Advantage Plan Sponsors are private insurance companies that are required to offer their members benefits and medications as good as or better than Original Medicare.
        Plan Sponsors were required to provide Medicare beneficiaries with their Annual Notice of Change (ANOC) by the end of September. It is important to review the ANOC to see what changes, if any, may affect benefits, specifically prescription drug (Part D) benefits. Make sure to have an updated list of prescription medications, including dosage and frequency, to assist in the process of comparing costs and benefits of the plans available in your area.
        Medicare Advantage Plans, also known as Medicare Part C, consist of Preferred Provider Organizations (PPO) or Health Maintenance Organizations (HMO). PPO plans provide coverage in and out of network while an HMO is more restrictive and provides in-network coverage only unless you're in an emergency situation. Make sure your provider and/or facility are contracted with a Plan Sponsor prior to enrolling. Also, while assessing plans available in your area, it is important to consider deductibles, copays, co-insurance and out-of-pocket limits.
        Melinda Shinaver is an Independent Licensed Insurance Agent and the owner of Compass Care Management, LLC in Oregon, and neither is affiliated with the U.S. government or Federal Medicare Program. Shinaver is licensed in Ohio, Michigan and Florida and does not offer every plan available in this area. Any information provided is limited to those plans offered in your area. Contact Medicare.gov or 1-800-MEDICARE to get information on all available options.