What are the benefits of the Inflation Reduction Act (IRA) of 2022 for Medicare beneficiaries?

This Act passed by Congress in 2022 is designed to save Medicare beneficiaries money on healthcare, especially the cost of prescription drugs.

Here are the main coverage/benefit changes:

  • $35 per month insulin. One of the first benefits enacted was capping Part D covered insulin costs at $35 per month starting 1/1/2023. Part B covered insulins were added in July 2023. Under the new Act, there are no deductibles for insulin with Parts B or D.
  • Drug costs capped at $2000 per year. Total out of pocket costs for Medicare drug plans will be limited to $2,000 per year starting in 2025.
  • Vaccines fully covered. Additionally, there will not be a co-pay for Medicare approved vaccines that are on the beneficiary's drug plan formulary beginning 1/1/2023.
  • Extra Help expanded. Low-income seniors who meet income limits can qualify for Extra Help with their drug costs. In 2024 Medicare Full Extra Help for low-income seniors will be expanded to 150% of the Federal Poverty Level ($20,385 for a single person). The category of Limited Extra Help will be eliminated. Asset limits have not changed.

There are also impacts to the drug companies. Those companies raising drug costs more than 6% will be penalized by CMS. Beginning in 2024, but not effective until 2026, CMS will begin negotiating drug prices. The initial negotiations will be for the top 10 most utilized and/or most expensive drugs. The list will be expanded in the years after 2026.

If you have questions or concerns about current Medicare coverage or are new to Medicare, PA MEDI counselors are trained and available to provide FREE, personalized, unbiased counseling. Please call your local senior center to schedule an appointment or leave a message on our Helpline 610-344-5004, Option 2, to talk to a counselor. Calls will be answered in 24 hours.

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20. What are the benefits of the Inflation Reduction Act (IRA) of 2022 for Medicare beneficiaries?