What’s new, what’s next for Rx

AARP VI members save on prescriptions in the VI

steve cole – christie & cole stu

By Dena Bunis

Medicines can be saved this year when laws come into force

Are you enrolled in Medicare and want to avoid shingles? Good news: Effective January 1, the Shingrix vaccine will be free for participants on a Part D prescription drug plan. Before this year, this two-dose vaccine could cost over $200 per dose.

Are you enrolled in Medicare and need insulin for your diabetes? More good news: Also starting January 1, your co-payment for a 30-day supply of insulin covered by your Medicare Part D plan is capped at $35. When insulin shortages hit during the pandemic, a month’s supply could cost hundreds of dollars.

These benefits are the first to reach consumers as a result of landmark legislation signed in August aimed at reducing drug costs. While they may seem modest in scope and only affect people on Medicare, broader reforms enacted over the next few years promise significant savings for far more Americans, a victory AARP has long fought for.

However, because the drug price changes were part of a much larger legislative package, public awareness of them is low. Find answers on what changes are planned and what’s likely still moving in 2023 to drive down drug costs.

-> Will other parts of the new law come into force this year?
Yes. Beginning in 2023, drug companies that increase prices above the general rate of inflation will have to pay Medicare a rebate for the amount that is above the rate of inflation. Another key feature of the new law allows Medicare to negotiate prices for a limited number of commonly prescribed drugs on behalf of Part D plans. By negotiating on behalf of tens of millions of beneficiaries, Medicare officials believe they can save billions of dollars. Those dollars could then be used to lower everyone’s premiums, fund other benefits, bolster the long-term health of the program, or make other program improvements.

-> What other changes are built into the new law? There are some that are sure to have a major impact on older Americans.
In 2024, once a Medicare Part D participant reaches the spending threshold for “disaster coverage,” they no longer have to pay out-of-pocket expenses. (Experts predict that threshold will be $7,750 by 2024.) Previously, they had to pay 5 percent of their drug costs above the threshold with no cap.

This is a stepping stone to the larger reform beginning in 2025: a $2,000 per year cap on out-of-pocket prescription drug spending for all Part D Medicare participants. Currently, there are no limits on how much Part D- Enrolled students have to pay out of their own pockets.

-> I’m not on Medicare yet. Is there anything in the law that will help me?
Perhaps. The new law continues to help those who buy health insurance in the individual market by extending the Affordable Care Act premium subsidy introduced under the American Rescue Plan Act of 2021 through the end of 2025. That means no one has to pay more than 8.5 percent of their annual income for ACA insurance.

-> Are other federal laws or measures in the works to lower drug prices?
president Joe Biden has said he plans to ask Congress again to introduce the $35 out-of-pocket insulin cap for all insurance plans, not just Medicare. Additionally, there are no other significant drug-related laws on the list.

-> What happens to the import of drugs?
Six states– Colorado, Florida, Maine, New Hampshire, New Mexico and Vermont passed laws that would allow residents to order drugs from another country, primarily Canada. Five of them have applied to the federal government for approval to start their programs, but all are awaiting a decision from the U.S. Food and Drug Administration. This authority must be sure that the imported drugs meet US standards. It is not yet known when the FDA will decide on these applications.

-> How are states participating in the fight to reduce drug costs?
Over the past five yearsmore than 240 measures were passed in all 50 states related to the high cost of medicines. The laws concern the importation of drugs, the establishment of drug affordability boards to monitor and respond to drug price increases, and caps on the cost of some drugs (particularly insulin).

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Greg McMullin

For ongoing updates on the fight to lower prescription drug prices and ways to get involved, visit aarp.org/drugprices.

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