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By Suzanne Blake
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The Centers for Medicare & Medicaid Services (CMS) provided guidance this week on how President Joe Biden's new lower-cost prescription drug law will affect Medicare recipients' ability to pay bills in 2025.
Under the new rules, beneficiaries will be able to spread their out-of-pocket prescription drug costs into monthly payments, reducing the financial strain on many seniors who are already struggling to get by.
The Inflation Reduction Act (IRA) changed the Medicare prescription payment plan to include the option of spreading the costs across several months instead of recipients being forced to pay the full amount while they're at the pharmacy counter.
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While the new option will be available in 2025, beneficiaries need to "opt into" the payment plan option. Starting in 2025, Medicare recipients will also see their yearly out-of-pocket drug costs capped at $2,000.
"The Medicare Prescription Payment Plan is one more way that President Biden is delivering on his promise of more predictable monthly costs for the American people," Health and Human Services Secretary Xavier Becerra said in a statement.
"No one should have to choose between paying for medicine or putting food on the table. Thanks to President Biden's lower cost prescription drug law, the Inflation Reduction Act, fewer seniors and people with disabilities have to make such difficult decisions and instead can focus on improving their health."
The IRA updated many Medicare rules, including capping out-of-pocket costs for a month's supply of insulin at $35.
It also allows Medicare Part D recipients to get recommended vaccines at zero cost and expanded the eligibility for the Extra Help program, which allows prescription coverage with no deductibles or premiums and fixed, lower co-pays.
Chris Fong, a Medicare specialist and the CEO of Smile Insurance Group, said seniors will see different impacts from the IRA depending on their specific circumstances.
"We foresee seniors who are taking and spending a lot on medication co-pays to see some relief on medication costs," Fong told Newsweek. "On the other hand, Medicare beneficiaries who are not spending or taking many medications may see increased costs."
Louise Norris, health policy analyst for medicareresources.org, agreed that Medicare Part D enrollees with lower-cost medications likely won't benefit from the payment plan, but it could still make a major difference in some seniors' lives.
"Not everyone with high-cost medications will choose to participate," Norris told Newsweek. "But it's important for enrollees to understand the program and to know that if they want to participate, they need to contact their Part D plan and ask to be enrolled in the Payment Plan."
Still, for those seniors who saw sky-high rates on multiple medications, the new payment plan could be a lifesaver.
"Rather than have to absorb the complete cost upfront, Medicare recipients can now opt to pay in installments over time," Alex Beene, a financial literacy instructor at the University of Tennessee at Martin, told Newsweek.
"This has been one of the most significant problems for Medicare recipients that hasn't gotten enough attention. Even with reduced out-of-pocket costs, the expenses are still too much for some to pay at once. These changes allow them to make these bills more manageable through multiple payments."
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