News

Medicare Begins to Rein In Drug Costs for Older Americans


Third big change: As prices for Part D covered drugs and some Part B drugs rise faster than the rate of inflation, the law now requires drugmakers to pay rebates or face penalties heavy.

While those discounts will go to Medicare and not individuals, “if you’re responsible for part of the cost of the drug and there’s a limit to how much can increase, in theory, your costs will go down,” says Mr. Lipschutz.

It will take several months for Medicare to determine which rate increase will drive the discount and how much the discount will be. But the Congressional Budget Office has estimated that the provision will save Medicare more than $56 billion over 10 years.

Medicaid has been using a similar strategy since 1990. “It certainly works to control spending,” Dr. Cubanski said. “The hope is that it will have the same effect on Medicare.”

The changes in the following years will be more dramatic.

In 2025, Medicare will place an annual limit of $2,000 on out-of-pocket spending by Part D beneficiaries. Dr. Cubanski said: “Today, a lot of drugs can cost $500. or $1,000 a month. “Or maybe you take 10 drugs and that adds up to an out-of-pocket cost.”

An even earlier kind of cap will go into effect in 2024. That’s when Medicare will eliminate the 5 percent copay that beneficiaries are responsible for after they pass a catastrophic spending threshold, effectively limits out-of-pocket costs to about $3,250. The $2,000 limit will be kept next year. Access to low-income subsidies will also be expanded.

Perhaps the most significant policy change is the new law requiring Medicare to begin negotiating with drug manufacturers, “for the first time the federal government is not only authorized but required to negotiate prices on behalf of drug manufacturers.” Medicare beneficiaries,” said Dr. Cubanski.

news7f

News7F: Update the world's latest breaking news online of the day, breaking news, politics, society today, international mainstream news .Updated news 24/7: Entertainment, Sports...at the World everyday world. Hot news, images, video clips that are updated quickly and reliably

Related Articles

Back to top button