A provision of the Inflation Reduction Act that will go into effect Jan. 1 will cap out-of-pocket costs for prescription drugs at $2,000 per year for people with Medicare Part D.
The cap will apply to individuals’ combined, total costs for covered drugs, regardless of how many medications they need.
Some estimates have shown that Virginians on Medicare will save an average of $440.62 on out-of-pocket costs on prescription drugs thanks to this cap.
U.S. Sens. Tim Kaine and Mark Warner, both D-Va., issued a joint statement highlighting the new law:
“The Inflation Reduction Act has already made a huge difference in the lives of Virginians. It’s capped the price of insulin at $35 per month for seniors, lowered health care and energy costs, brought millions of dollars in investment to Virginia, and created manufacturing jobs—all while lowering the deficit. We’re thrilled that beginning in 2025, Americans on Medicare will have a $2,000 per year out-of-pocket cap on prescription drugs. Many seniors currently pay thousands of dollars a year for medications they need, so this provision is crucial to saving them money. We will keep working to build on this progress and ensure that Virginia harnesses all the benefits of the Inflation Reduction Act.”
Looking ahead
In 2025, the Centers for Medicare & Medicaid Services is also expected to announce 15 more Medicare Part D drugs for negotiation.
The Inflation Reduction Act allowed CMS to negotiate the price of prescription drugs for the first time – a move Warner and Kaine had long pushed for.
This year, the Biden administration announced negotiated prices for the first 10 drugs for patients covered by Medicare Part D. The negotiated prices for the first 10 drugs, which will go into effect in 2026, will save $1.5 billion for Americans with Medicare Part D and $6 billion in the federal budget in the first year of implementation.
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Chris Graham
