Inflation Reduction Act and Medicare

The Inflation Reduction Act provides meaningful financial relief for millions of people with Medicare by expanding benefits, lowering drug costs, and strengthening Medicare for the future.

New in 2025: $2,000 Out-of-Pocket Cap

This year, people with Medicare Part D prescription drug coverage will benefit from a new $2,000 out-of-pocket cap on prescription drug costs. The new out-of-pocket cap is just one of the ways the Inflation Reduction Act is working to lower drug costs and make health care more accessible for everyone.

With the $2,000 cap in effect this year, 19 million seniors, and others on Medicare, are expected to save an additional $7.4 billion in out-of-pocket costs. Check out how much people with Part D coverage saved in the first part of 2024 thanks to the cap.

Check out how the Inflation Reduction Act is lowering drug costs for people with Medicare

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Inflation Reduction Act Toolkit

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Resources

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Lowering Drug Costs in Action

Accomplishments under the Inflation Reduction Act:

Many people with Medicare are already seeing lower costs for the health care they need:

Medicare Inflation Rebates Inflation Reduction Act Card

People with Medicare pay no more than $35 for a month’s supply of each covered insulin product

Over 3 million Medicare Part D enrollees who filled an insulin prescription in 2023 received a monthly supply of insulin for $35 or less

Free recommended preventive vaccines with Medicare Part D prescription drug coverage

Expanded eligibility for the Low-Income Subsidy program, also known as Extra Help, to provide more enrollees with $0 premiums, $0 deductibles, and fixed, reduced copays

Medicare Prescription Drug Coverage Improvements Inflation Reduction Act Card

Drug manufacturers pay rebates to Medicare when they raise their prices faster than the rate of inflation

64 Medicare Part B drugs will have lowered costs for from January 1 – March 31, 2025

Medicare Drug Price Negotiation Inflation Reduction Act Card

New, lower prices in 2026 for 10 selected drugs through Medicare negotiations with participating drug companies

These negotiated prices range from 38 to 79 percent discounts off of list prices

About nine million people with Medicare use at least one of the 10 drugs selected for negotiation

CMS will select up to 15 Part D drugs for the second round of negotiations by February 1, 2025

State-based Marketplaces and Medicaid Inflation Reduction Act Card

In 2025, Medicare Part D plans will cap annual out-of-pocket costs at $2,000

This year, Medicare Part D plans will offer the option to pay out-of-pocket prescription drug costs in monthly installment payments instead of all at once, allowing for smaller, more predictable payments for high cost drugs

Health care cost savings by state

Hover over a state to see the estimated savings under policies limiting Part D out-of-pocket costs thanks to the Inflation Reduction Act. Click on a state to read the full infographic. An infographic with national data is also available in English and Spanish.

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Inflation Reduction Act and Medicare

New in 2025: $2,000 Out-of-Pocket Cap

Lowering Drug Costs in Action

Accomplishments under the Inflation Reduction Act:

$35 Insulin Cap and Other Savings

Inflation Rebates

Drug Price Negotiations

Medicare Part D Out-of-Pocket Costs

Health care cost savings by state

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