Big changes to Medicare: Capped costs, lower insulin prices, and free vaccines

November 7, 2023

Millions of people on Medicare Part D are about to see some big changes, as AARP reports.

The most anticipated change is a cap on out-of-pocket costs. Starting in 2025, beneficiaries will have a yearly cap of $2,000 on their prescription drug expenses. If your plan has a deductible, it will count towards the cap, ensuring you hit the $2,000 limit sooner. It’s a game-changer, offering security and predictability in health care expenses.

In 2024, the year before the cap takes effect, beneficiaries will enjoy zero out-of-pocket costs once they enter what Medicare calls “catastrophic coverage.” In 2022, catastrophic coverage meant paying 5% of prescription drug costs with no limit after reaching $7,050 in out-of-pocket expenses. However, from 2024 on, there will be no coinsurance requirement, translating to no prescription drug expenses for the rest of the year.

Another development will allow beneficiaries to spread their out-of-pocket costs throughout the year, starting in 2025. This is designed to protect people from being hit with a big, one-time drug costs.

Changes that took effect this year included a $35 cap on a 30-day supply of any insulin covered by Medicare – regardless of whether someone has met their deductible. Then, starting in 2026, insulin copays will be either $35 or 25% of the negotiated price, whichever is less.

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