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Some Medicare Changes From The Inflation Reduction Act

September 22, 2022

We all know prices for drugs continue to increase. The new legislation offers some relief under Part D – Prescription Drugs.

  • Maximum out of pocket will be $2,000 for drugs starting in 2025
  • Insulin: monthly cap of $35 per month for co-pays
  • Penalties in the form of rebates to the government should drugmakers increase prices higher than general inflation
  • Government will start negotiating for better pricing beginning in 2026. It is phased in starting with the 10 most expensive drugs; expanding to the next 20, etc. As an aside, Medicaid and the Department of Veterans Affairs already negotiate drug prices.
  • Expanded eligibility for the Low-Income Subsidy program aka Extra Help.

Based on an article by Mark Miller, Remaking Retirement, Morningstar

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