Update on Implementation of the Inflation Reduction Act (IRA) 

In 2022 the Inflation Reduction Act (IRA) was passed by Congress with an aim to lower health care and prescription drug costs.  This article provides information on when and how changes will impact persons on Medicare.

Changes that were implemented:

Insulin Caps

In January 2023 the IRA introduced caps for certain covered insulin products for Medicare Part D beneficiaries. Under this cap the covered insulin products were capped at $35 per month- and the deductible no longer applies.  The federal Department of Health and Human Services estimates the insulin cap is resulting in annual out-of-pocket savings for Iowans impacted of $725. 

Additional Vaccines

Also already in place is coverage for some additional vaccines- including shingles, COVID-19 and TDAP (tetanus, diphtheria, and pertussis).

Changes that are upcoming:

Prescription Drug Price Negotiations

The IRA also includes provisions to negotiate reduced pricing on some of the most used drugs covered under Medicare Part D. In 2023 CMS (the Centers for Medicare & Medicaid Services) announced the list of the first 10 drugs for negotiation.  They are: Eliquis, Jardiance, Xarelto, Januvia, Farxigo, Entresto, Enbrel, Imbruvica, Stelara, and Fiasp/ Novolog. Negotiations are underway between CMS and the manufacturers of the selected drugs, with the newly negotiated pricing set to begin January 1, 2026.  

An additional benefit of the negotiation provision is that all plans will also be required to cover all drugs that are selected for negotiation, including all dosages and forms. This is likely to also improve access to additional prescription drugs for more Iowans.

After the first round of negotiations for 10 selected prescriptions, CMS will then select three more rounds of prescriptions for negotiations.  New pricing on these additional rounds of negotiated prescriptions would become effective in 2027 and each year after that. 

$2,000 Out-of-Pocket Spending Cap for Medicare Part D

One of the most exciting changes under the IRA has been changes to limits on out-of-pocket costs. The IRA changes how the Part D benefit works. The most change occurs in 2025 when the new, $2,000 cap on out-of-pocket spending goes into effect.  KFF reports that the average Medicare Part D enrollee will save an estimated $1,355 annually.