This week the Department of Health and Human Services (HHS), through the Centers for Medicare & Medicaid Services (CMS), announced the list of 41 drugs available through Medicare Part B that will have a lowered Part B coinsurance rate from April 1 – June 30, 2024, if the drug company raises prices faster than the rate of inflation. HHS estimates that 763,700 people with Medicare use one or more of these drugs annually.
This lowered coinsurance rate is due to a provision of the Inflation Reduction Act (IRA), which President Biden signed into law in 2022. The IRA includes an extensive expansion of Medicare prescription drug benefits, including this check on the annual rise in costs of drugs by requiring drug companies to pay rebates if prices rise faster than inflation.
The IRA also includes provisions to expand access to the full Part D low-income subsidy (“Extra Help”) up to 150% FPL (federal poverty level); HHS estimates that 300,000 people with low and modest incomes are now benefiting from this expansion.
Another provision caps beneficiary out-of-pocket Part D drugs costs at $2,000 per year starting in 2025. Starting this year some people enrolled in Medicare Part D who have high drug costs have a cap of about $3,500. The IRA also allows Medicare to negotiate with drug manufacturers for the price of some Part D and Part B drugs, with lower prices taking effect in 2026.
Additional Resources:
- CMA Alert on IRA: Inflation Reduction Act (Medicare Drug Law) Updates – Including Part D Low Income Subsidy – Center for Medicare Advocacy
- KFF: What Are the Prescription Drug Provisions in the Inflation Reduction Act? | KFF
- KFF: Millions of People with Medicare Will Benefit from the New Out-of-Pocket Drug Spending Cap Over Time | KFF
March 28, 2024 – K. Kertesz