Starting on January 1, 2024, additional changes are impacting your prescription drug plan. The Inflation Reduction Act of 2022 (IRA) made several amendments and additions to the drug benefits defined in the Social Security Act. Regardless of the Part D carrier you have, expect to see the changes outlined below to your plan design.
To understand what a large impact these amendments will have, it helps to consider what Part D enrollees currently pay for high-cost medications. As an example, these five drugs have the highest per capita Part D costs in 2021 and were taken by more than 10,000 Part D enrollees: Revlimid, Pomalyst, Imbruvica, Jakafi, and Ibrance.
The annual out-of-pocket costs per each drug in 2023 ranges from over $11,000 to nearly $15,000. Out-of-pocket costs for each drug in the catastrophic phase range from around $8,000 to nearly $12,000 . (These estimates do not take into consideration the cost of other drugs that enrollees might be taking.)
In 2024, you will see the following changes:
Your Part D deductible will go up to $545.
Your out-of-pocket costs during the catastrophic phase will change. The 5% coinsurance required of Part D enrollees will be eliminated and Part D plans will pay 20% of total drug costs in this phase instead of 15%.
The catastrophic threshold will be set at $8,000, going up $600 from 2023. Members qualify for catastrophic coverage when the amount that they pay out-of-pocket plus the value of the manufacturer discount on the price of brand-name drugs in the coverage gap phase exceeds the threshold.
It is estimated that enrollees who take only brand-name drugs in 2024 will have spent about $3,300 out of their own pockets and will then face no additional costs for their medications.
The national base beneficiary premium was $33.37/month in 2022, and declined slightly to $32.74/month in 2023. The base beneficiary premium is what the government uses to calculate the Part D late enrollment penalty, and in a nutshell it is simply the average premium amount for standard Part D coverage. There is wide variation in Part D premiums from one plan to another; some are currently as low as $5.61/month, while others are over $100/month, depending on the plan and the location.
The IRA has issued a limit on how much the base beneficiary premium can increase in 2024 and it will help prevent insurers from pushing the cost of the new coverage requirements onto beneficiaries in the form of higher premiums. This does not mean that every plan’s premium increases will be capped, and it will still be important for enrollees to actively participate in the Annual Enrollment Period starting in October to make sure they are still on the most cost efficient plan for their prescription needs.
The calculation of the base beneficiary premium will be adjusted, as needed, to limit increases in the base premium to no more than 6% from the prior year.
In 2024, the Low-Income Subsidy will no longer offer a partial help program. Instead, full benefits will be offered to people enrolled in Medicare who have limited resources. This means that those who qualify will have the majority, if not all out-of-pocket costs for prescription medications covered. They will have no deductible, no premium and fixed lower copays for certain medications.
The Low-Income Subsidy program (LIS) under Part D will be expanded to include beneficiaries who earn between 135 and 150 percent of the federal poverty level. For an individual, the 2023 limit is $21,870. If enrollees meet resource limit requirements , they will receive the full LIS subsidies, which prior to 2024 were only available to beneficiaries making less than 135 percent federal poverty level. See if you qualify by going here, or if you need help and have questions, call Social Security at 1-800-772-1213.
Starting January 1, 2023, Medicare Advantage (MAPD) and Medicare Part D enrollees who received an ACIP suggested vaccine, such as Tdap and shingles, had their out-of-pocket costs eliminated. This move was made by the IRA so that MAPD and Part D vaccines that are suggested from ACIP are treated the same as Medicare Part B vaccines. There have been instances where the consumer has been charged an administration fee at the time of service, but they have been able to contact their MAPD or Part D plan for reimbursement, as long as the vaccine meets the criteria above.
Your best benefit will always be by going to a preferred pharmacy within your plan. To find out who your preferred pharmacies are, you can go onto the member website and look it up, call your carrier or you can call into our office and one of our helpful staff will look it up for you.
MAPD and Part D plans must not apply the deductible to an adult vaccine recommended by the Advisory Committee on Immunization Practices (ACIP) and cannot charge at any point for such vaccines.
While your cost-sharing amount of insulin will apply towards your deductible, you do not have to meet the deductible in order to partake in the cap- as long as your insulin is covered. A covered insulin product is one that is included on a Part D sponsor's formulary drug list. This includes new insulin products that become available during the plan year. If the insulin is not on the formulary list, you will not be able to take advantage of the cap. The amount Medicare pays for a covered insulin product that would have been otherwise paid by the enrollee will count towards the deductible and the total True Out-of-Pocket costs. This will in turn count towards the progression into the catastrophic phase.
Continuing into 2024, MAPD and Part D plans must not apply the $545 deductible to any Part D covered insulin product. They cannot charge more than $35 per month’s supply of a covered insulin product in the initial coverage phase and the coverage gap phase.
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Sources: Kaiser, Medicare, Cal Matters. Medicare Resources, CMS, National Council on Aging, Advisory Committee on Immunization Practices