March 12, 2024 - President Biden’s prescription drug law, the Inflation Reduction Act, was signed into law on August 16, 2022. This new law provides meaningful financial relief for millions of people with Medicare by expanding benefits, lowering drug costs, and strengthening Medicare for the future.

Thanks to the President’s new lower cost prescription drug law, the lives of Medicare enrollees are changing for the better. The benefits for seniors and people with disabilities include:

• A $35/month cap on the cost of each Medicare-covered insulin product;
• Free recommended adult vaccines, such as shingles and RSV, for Medicare Part D enrollees;
• Continued enhanced subsidies for Marketplace plans, reducing the cost of premiums for eligible individuals;
• Rebates to be paid by drug manufacturers to Medicare if they increase their prices for certain drugs at a rate that exceeds the rate of inflation, reducing the costs of some drugs;
• A $2,000 annual cap on out-of-pocket costs in Medicare Part D in 2025; and
• Medicare directly negotiating drug prices with manufacturers.

The President’s FY 2025 budget builds on the Inflation Reduction Act and lowers the cost of prescription drugs for even more Americans, including the 189 million Americans under age 65 with private insurance coverage, by proposing to:

• Let Medicare Negotiate More Drug Prices: Medicare should not be limited to negotiating just 20 drugs or fewer per year. Instead, the President is proposing that Medicare be able to negotiate prices for more drugs that seniors and people with disabilities rely on, including more drugs used to treat heart disease, cancer, and diabetes.
• Expand Cap on Out-of-Pocket Prescription Drug Costs: The President is calling on Congress to expand the $2,000 out-of-pocket cap in Medicare Part D that was created in the Inflation Reduction Act to all private insurance market plans so that the 189 million Americans under 65 with private insurance have the peace of mind that comes with knowing that they won't have to choose between filling their prescription or putting food on the table.
• Test Lower Cost-Sharing for High-Value Generic Drugs in Medicare: The Center for Medicare & Medicaid Innovation is developing a new model to test lower Medicare Part D cost-sharing for certain high-value generic drugs of $2 for a month’s supply. The President is calling on Congress to limit Medicare cost-sharing to $2 for high-value generic drugs for all Medicare plans.
• Expand the Inflation Reduction Act’s Requirement that Drug Companies Pay Rebates When They Increase Prices Faster than Inflation: Thanks to the President’s prescription drug law, drug manufacturers must now pay rebates to Medicare if prices increase for certain Part B and Part D drugs exceed the rate of inflation. The President is calling on Congress to require those rebates for commercial drug sales. This will further curb prescription drug price inflation for everyone and could reduce health insurance premiums for the millions of Americans with private health insurance coverage.
  Source: HHS