Most medicare part d enrollees who reach the new $2,000 out-of-pocket spending cap will see substantial savings despite premium changes

The Inflation Reduction Act of 2022 contains several important provisions that work together to help reduce prescription drug costs for the Medicare program and its beneficiaries. Some

critics of the law have argued that recent Part D premium changes are an indication that the law will lead to higher costs for enrollees. This updated analysis attempts to respond to this

assertion by incorporating 2025 Part D plan premium data to assess whether enrollees who reach the new $2,000 out-of-pocket spending cap will have lower total (i.e., premiums plus cost

sharing) out-of-pocket costs in 2025.   This analysis finds that an estimated 94 percent of all Part D enrollees expected to reach the $2,000 out-of-pocket cap in 2025 will have lower total

out-of-pocket costs, saving an average of $2,474. This amount represents a 48 percent reduction in their total out-of-pocket costs. The analysis also found that, on average, 62 percent of

the enrollees will save more than $1,000 and 12 percent will save more than $5,000. The full analysis includes a breakdown of the share of Part D enrollees estimated to reach the new

out-of-pocket spending cap and see lower total (i.e., premiums plus cost sharing) out-of-pocket costs, as well as their estimated savings, by Part D plan type (Medicare Advantage or

stand-alone plans) and by state of residence. These results confirm that recent Part D plan premium changes have been more than offset by lower cost sharing for most of this enrollee

population. This positive offset will only grow larger as lower prescription drug prices start to become available in 2026 and cause enrollees’ premiums and cost sharing to decrease.  It is

also important to note that the benefits of the 2022 law extend beyond the Part D enrollees who reach the new $2,000 out-of-pocket spending cap. Federal research indicates that nearly 19

million Part D enrollees will save an estimated $7.4 billion in annual out-of-pocket costs once the law’s Part D coverage-related provisions are fully implemented in 2025.  Although the 2022

law is off to a promising start, it will be important to continue evaluating its overall impacts to confirm that it is achieving its goal of ensuring Medicare beneficiaries have affordable

access to the prescription drugs they need.