By Suzanne Potter, California News Service
September 12, 2024 (Sacramento) –Hundreds of thousands of older Californians will see huge savings on prescription drugs starting in January, according to a new report from AARP.
That’s because the Biden administration’s Inflation Reduction Act caps prescription drug costs at $2,000 per year for people on Medicare, starting in 2025.
An estimated 271,000 people in the Golden State will hit the out-of-pocket maximum next year, Nina Weiler-Harwell, associate director of advocacy and community engagement for AARP California, said.
“Medicare drug plan enrollees nationwide who reach the new out-of-pocket cap will see an average savings of roughly $1,500,” said Weiler-Harwell, “or 56% in 2025 for new prescription drugs.”
On average, 40% of people on Medicare who reach the cap will save at $1,000 a year. And 12% will see savings of more than $3,000.
Every year from 2025 to 2029, between 3 and 4 million Part D plan enrollees are estimated to benefit from the new out-of-pocket cap.
Weiler-Harwell said the Inflation Reduction Act introduced a number of new policies to cut costs for Americans on Medicare.
“Copays for insulin capped at $35 a month,” said Weiler-Harwell. “Vaccines such as shingles and pneumonia are free. The Inflation Reduction Act did allow Medicare to negotiate the price of high-cost prescription drugs. But we won’t really start to see that until 2026.”
Also thanks to the IRA, drug companies will have to pay a penalty if they raise their prices higher than inflation.