Medicare Changes

Federal Regulation impact to plans

The Inflation Reduction Act (IRA) was signed into law on August 16th, 2022. The law includes provisions that are focused on lowering prescription drug costs for people with Medicare and reducing costs to the Federal Government. These regulations include a redesign of the Part D program for 2025, which is described below.

On April 1,2024 The Centers for Medicare & Medicaid Services (CMS) announced a 3.7% increase in payments to insurers. This is significantly lower than initially anticipated and does not account for inflation.

For 2025, there will be changes to the Part D program as a result of the Inflation Reduction Act, impacting both stand-alone Part D and Medicare Advantage Prescription Drug Plans. It is important that you are informed on these changes to help understand how you may be impacted.

Part D Plan Changes

2023-2025 IRA Changes to Part D

202320242025
-$0 cost-sharing for adult
vaccines
-$35 cap on Part D Insulin
cost-share (Part D Start: 1/2023 Part B Start: 7/2023)
-Inflationary rebates for Parts B and D (Start: 10/2022)
-Pharmacy network DIR at
point-of-sale changes
-Annual increase in national
average premium cap
(through 2029)
-Expansion of low-income
cost-sharing and premium
subsidy eligibility (from
135% FPL to 150% FPL)
-Member pays $0 in the
Catastrophic stage
-Part D Benefit Redesign:
Elimination of the Coverage
Gap (“donut hole”)

-Reallocation of costs in the
Catastrophic stage
$2,000 maximum true out-of-
pocket (TrOOP)

-New Manufacturer Discount
Program
-Medicare Prescription
Payment Plan

Manufacturer Discount Program

A 10-20% mandatory discount from prescription manufactures during a beneficiary’s initial and catastrophic coverage phases. This discount will be waived if other discounts are applied, such as Good Rx. The MDP is built into the prescription price and may not be reflected on EOBs or receipts. Discounts do not apply to the TrOOP calculation.

Medicare Prescription Payment Plan

CMS has introduced the Medicare Prescription Payment Plan offering members the option to pay $0 at the point-of-sale, and instead, pay for their prescriptions through a monthly payment program during the calendar year. This program applies to stand-alone Prescription Drug plans and Medicare Advantage plans with prescription drug coverage.