Four Major Impacts to Medicare from the Inflation Reduction Act

The prescription drug costs we pay in the U.S. are among the highest in the world. As a result, the health of too many Americans—especially those with low and limited income, such as millions of seniors—worsens. The federal government took an important step in providing more affordable drugs and financial relief for millions of American seniors on Medicare with the Inflation Reduction Act (IRA), which was signed into law in 2022. The IRA reduces the financial burden if you are on Medicare by expanding benefits, lowering costs and keeping premiums stable and predictable.

Several IRA changes have already taken effect, with more impactful benefits set to roll out by 2025. Here are the four things you should know about the law.

1. Lower Out-of-Pocket Prescription Drug Cap

   In 2025, all people with Medicare Part D (prescription drug coverage) will pay no more than $2,000 out-of-pocket for their prescription drugs, a significant improvement from the previous $5,000 limit. This will not only make prescription drugs more affordable, but also helps improve access to care by reducing financial barriers. At MVP, most of our Medicare Advantage plans include Part D prescription coverage, making it even easier to manage prescription needs and expenses. Every Medicare enrollee that has Part D coverage—through MVP or another health plan—will benefit from this lower out-of-pocket cap.

2. New Prescription Payment Plan (M3P)

   Another change going into effect in 2025 is the “M3P,” which provides a new payment installment option for Medicare enrollees to better manage their drug costs. This is a significant benefit for those on fixed and limited incomes who might otherwise need to forgo care or face the difficult financial choice of paying for their health care needs or other vital costs-of-living such as rent and food. The M3P provides customers the option to spread their out-of-pocket prescription drug costs over a 12-month period. This option provides individuals with more flexibility, allowing for higher prescription payments early in the year to spread out the expenses in multiple payments instead of a one-time expense. This change empowers Medicare recipients to take charge of their health care journey and payment plans.

3. Capped Insulin Prices

   Like many prescriptions, insulin can be expensive and even cost prohibitive. The IRA addresses this by ensuring that people on Medicare will not pay more than $35 a month for insulin products. This change has been in effect since 2023 and applies to customers with Medicare Advantage (also known as Medicare Part C), Medicare Part D, or Medicare. For people with MVP's Medicare Part D coverage, medications like glimepiride, glipizide tabs and metformin tabs are a few of the prescription drugs covered at no cost to our customers.

4. Zero-Cost Vaccine Coverage

   Vaccines are an important tool to protect individuals and the public against diseases. Since 2023, the IRA has allowed people with Medicare Part D and Medicare Advantage to get vaccines recommended by the Centers for Disease Control and Prevention (CDC) for free. This means that CDC recommended vaccines do not require a deductible (amount you pay before insurance kicks in), coinsurance (percentage of the cost after the deductible) or a copay (flat amount paid for a service) requirement. For example, a person with Medicare Advantage can receive the shingles vaccine at no cost.