A brand new Medicare cap went into effect on January 1st, 2025 and caps prescription drugs at $2,000 a year for enrollees , a drop for the 2024 cap number and representative of some big savings for seniors.
Since President Joe Biden signed the Inflation Reduction Act into law in 2022 there has been a yearly dig in the price cap, with this year providing another drop in costs as it aims to address drug cost issues for seniors and other Americans as well.
“As a result, 19 million people are expected to save an average of $400 each,” Biden said earlier this month regarding the bill, via an official statement. “My Inflation Reduction Act has changed Medicare for the better, and as a result Americans will have more money back in their pockets in the years to come.”
It’s important to note that the new $2,000 out-of-pocket cap on prescription drugs covers everyone with a Medicare Part D plan, the section of Medicare that covers most pharmaceutical products, and also includes people with drug plans through Medicare Advantage, which are offered by private insurers.
According to CBS News, the cap includes all the prescriptions that are in a Medicare recipient’s Plan D formulary, or a plan’s list of covered drugs, so if a drug is not under that list of covered drugs, it will not be covered by the cap.
