How Will The Inflation Reduction Act Impact You?

Earlier this month, President Biden signed into law the Inflation Reduction Act. This act impacts both Medicare and ACA enrollees.

Medicare:

• Limits monthly cost sharing for insulin products to $35 in 2023,
• Covers many vaccines under Part D, such as shingles, for $0 in 2023,
• Eliminates the 5% coinsurance for catastrophic coverage in Medicare Part D in 2024,
• Adds a $2,000 cap on Part D out-of-pocket spending in 2025,
• Implements negotiated prices for certain high-cost drugs beginning in 2026 (with limitations; this list will be published in September 2023)
• Limits annual increases in Part D premiums for 2024-2030 to no more than 6% per year

ACA:

• Extends the enhanced tax credit subsidies for insurance purchased through the Federal Exchange (aka “Marketplace”) through 2025,
• Increases amount of premium tax credits available to individuals between 100-400% of the Federal Poverty Level

While the rest of this is pure speculation, we clearly need to wait and see how things play out. We do know that the rules for which medications are being price-negotiated with Medicare are very specific with a maximum number of medications being reviewed per year. For instance, it cannot be a newly released medication and it cannot offer a generic equivalent. We also know that the premiums for ACA plans are expected to increase in 13 states for 2023 to help cover the increased costs the companies are experiencing.

What we don’t know is the impact this will have on the Part D formularies. For instance, while each formulary must include at least two drugs per category, will the changes reduce the number of alternatives each plan currently offers? Will the copays for Tier 1 and 2 medications (typically generics) be increased to help offset the costs?

Many people have reached out to team with questions and concerns, and I can assure you that our office will be following the news, continuously educating our staff and will share information as it becomes available. In the meantime, the annual enrollment periods are quickly approaching. The best thing you can do schedule an appointment to see what specific impacts these changes have on YOU.

Medicare Annual Enrollment Period:
Review 10/01 – 10/14
Changes allowed 10/15 – 12/07

ACA / Marketplace (CareSource, Ambetter, Anthem)
11/01 – 12/15 for 01/01 effective dates
12/16 – 01/15 for 02/01 effective dates

More information can be found here:
Changes to Medicare Part D Under New Law (aarp.org)
FACT SHEET: How the Inflation Reduction Act Helps Rural Communities – The White House

If you would like to learn more click here to contact our office and schedule an appointment.