Last year, the Inflation Reduction Act was passed to reduce the federal budget deficit and control inflation in various ways. One significant area affected by this law is healthcare in our country.
The federal government has implemented six reforms that change how we interact with Medicare. These changes are designed to make it easier for people to access health services and even for more people to afford them.
Let’s look at how these changes affect our lives and those we care about.
The six major Medicare reforms are:
Vaccines Coverage (Effective January 1, 2023)Medicare Part D and Medicare Advantage plans will no longer require out-of-pocket expenses in terms of deductibles, co-insurance, and co-pays for adult vaccines recommended by the CDC’s Advisory Committee on Immunization Practices.
This means that these vaccines are free within these healthcare plans. The reform also covers vaccines from your doctor’s office if you have a Part B plan.
The cost-sharing for insulin products is now capped at a maximum of $35 per month for people with Medicare. This applies to both Part D and Part B coverage. It covers items like injectable insulin, syringes, and gauze in Part D Plan and insulin injected through traditional pumps in Part B Plan.
In addition, there’s also a special enrollment period until December 31, 2023, to make changes to your Part D coverage related to insulin.
Full benefits will be offered to people with Medicare whose incomes are up to 150 percent of the federal poverty level. For reference, 2023’s federal poverty level has been set at $21,870 meaning that you can be eligible for full benefits if your annual income is lower than $22,000 or $30,000 for married couples.
That said, there will be no or reduced deductibles, no premiums, and lower copays for prescription medications.
Elimination of the Five Percent Co-insurance for Part D Catastrophic Coverage (Beginning in 2024)
In 2022, the catastrophic threshold was set at $7,050, and Medicare Part D beneficiaries typically incurred around $3,000 in prescription expenses before entering the catastrophic coverage phase.
At that point, you would shoulder 5% of their drug costs until the end of the year. Starting next year, however, the co-insurance burden will be entirely eliminated – effectively reducing it to zero percent – thus capping out-of-pocket costs for prescriptions.
Starting in 2025, there will be a maximum limit of $2,000 per year for prescription drug costs in Medicare Part D. This means you won’t pay more than this amount for your prescribed drugs in a Part D plan.
The cap will be adjusted for inflation in later years and excludes prescriptions covered under Part B.
Medicare prescription drug plans, including Medicare Advantage plans with drug prescription coverage, will let patients choose to pay their out-of-pocket prescription costs in monthly installments.
For example, if your prescriptions total $1200, this will be evenly distributed each month. You’ll only be liable to pay $100 monthly. However, this option isn’t automatic; you’ll need to enroll in it.
The United States has the most expensive healthcare in the world, and there is still room for improvement. However, with these new reforms, it doesn’t have to remain costly for commonfolk like you and me.
