What is the Inflation Reduction Act and how will it impact Medicare?

Published by Medicare Made Clear®

The Inflation Reduction Act of 2022 (IRA) is a new federal law that makes improvements to the Medicare program. Among other things, the IRA will expand Medicare benefits and help reduce Medicare members’ out-of-pocket costs for prescription drugs.

What changed in 2023?

Insulin and vaccine coverage changed for Medicare Part D members.

Changes to Medicare insulin coverage

As of January 1, 2023, the IRA capped member cost-sharing for Part D-covered insulin products at $35/month. This means that members can obtain insulin at $35/month per covered prescription (or less if their plan benefit has lower cost for insulin), regardless of benefit phase and without needing to meet their deductible.

Medicare Part D covers these forms of insulin:

  • Injectable insulin that is not used with a traditional/reusable insulin pump
  • Insulin used with a disposable pump 

It’s important to note that the Medicare Part D $35 monthly cost-sharing cap does not currently apply to traditional insulin pumps or insulin patch pumps. However, as of July 1, 2023, if you use a traditional insulin pump that is covered under Medicare Part B as durable medical equipment (DME),1 your Part B-covered insulin will be subject to the $35/month cost-sharing cap.

Changes to Medicare vaccine coverage

As of January 1, 2023, Part D-covered adult vaccines that are recommended by the Advisory Committee on Immunization Practices (ACIP) are now available to members at no cost. This means members with Medicare Part D coverage can get ACIP-recommended vaccines without paying any cost-sharing and without meeting their deductible.1 The shingles vaccine, Tetanus-Diphtheria-Whooping Cough vaccines and the influenza vaccine are just a few of the ACIP-recommended vaccines included. For more information, the Centers for Disease Control and Prevention (CDC) website offers a complete list of vaccinations that are recommended by the Advisory Committee on Immunization Practices.

How will the Inflation Reduction Act affect my Medicare Part D coverage over time?

  • Members will no longer have to pay any cost-sharing once they reach the catastrophic phase of their Medicare Part D drug coverage
  • Full eligibility for the low-income subsidy program (or “Extra Help”) will be expanded for those with Medicare Part D
  • Medicare Part D coverage will have an out-of-pocket maximum of $2,000 for prescription drug costs for the plan year
  • Those with Medicare Part D coverage may have the ability to spread out their out-of-pocket costs for prescription drugs over the course of the plan year
  • The coverage gap phase will be eliminated

For additional information related to the IRA and how it may impact your current or future Medicare Part D coverage, you can visit cms.gov.

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