Initially, paying the deductible of a Medicare Part D plan and its related costs could be difficult for some American families, so it’s good news that partial payment plans are on track to become available starting in 2025. The Inflation Reduction Act’s Medicare Prescription Payment Plan brings a new payment option for those high-cost medications that, throughout the year, are a very heavy economic burden for American families.
The idea of these new Medicare plan is that the payments for high-cost medicines are distributed throughout the year, instead of being a large lump sum at the beginning of the year. The new payment system, which will take effect from 2025, will help elderly and disabled people to combat the high costs of these medicines that help them maintain their good health and well-being.
How the New Medicare Drug Payment Plan Works
According to Jae Oh, a Medicare expert and author of the book “Maximize Your Medicare,” once a Part D Plan member reaches their plan limit, the 5% coinsurance requirement during a catastrophic coverage phase will be eliminated. Instead, out-of-pocket expenses will be capped at $2,000 in 2025.
Starting in 2025, Medicare Part D plans and prescription drug manufacturers will have more responsibility for covering the costs of catastrophic coverage. The CMS has opened a 30-day period for people to express their opinions on this new guidance. Comments should be sent to [email protected] before March 16th. It is not yet known who will handle these payment plans, but the CMS will provide more information in the future to clarify this aspect.
Since 2025, the Inflation Reduction Act establishes that Medicare prescription drug plans (popularly known as Medicare Part D), including those standalone plans and Medicare Advantage plans, must offer users the ability to pay for prescription drug costs out-of-pocket in limited monthly payments, and they should not be required to make a single annualized payment at the pharmacy. This is new and seeks to make it easier for Medicare beneficiaries to manage drug costs.
From January 1, 2025, the beneficiaries reached by this new legislation will be able to access, among other things, the following benefits:
- Vaccines recommended by health agencies, at no cost.
- Limits on out-of-pocket costs for a one-month supply of each insulin product worth $35.
- Limits on out-of-pocket drug costs to a maximum of $2,000.
- Expanded eligibility for “Extra Help” assistance programs for low-income patients. Benefits such as the absence of deductibles, the absence of premiums and fixed and reduced co-payments for some medicines will be available to them.
- Pay a rebate to Medicare if prices rise faster than the rate of inflation.
Who qualifies for Medicare Part D?
Medicare Part D plans are available to eligible individuals who meet certain stated requirements. They are the populations of adults over the age of 65 and people of any age with disabilities or terminal illnesses.
This plan is enabled for people who are already enrolled in Medicare Part A and/or Part B, but those who already have coverage through a Medicare Advantage, which are the private plans available throughout the United States market, can also enroll in Plan D.
People who want to receive Medicare Part D benefits must also meet citizenship or legal residency requirements in the United States, so the system is not enabled for those who are undocumented.
