Starting Jan. 1, seniors on Medicare will spend no more than $2,000 a year on prescription drugs when a new out-of-pocket price cap under the Inflation Reduction Act takes effect.
Experts say this change is expected to provide major relief to cancer patients who often struggle to afford their medications due to the high cost of cancer drugs.
Diana DeVito, of Canonsburg, Pennsylvania, remembers the shock she felt after she received her first co-payment for the cancer drug Imbruvica in 2016.
The 83-year-old was diagnosed with chronic lymphocytic leukemia, a type of blood cancer that begins in the bone marrow, in 2005. She underwent treatment, including chemotherapy, and entered remission. When her infection recurred, she started taking Imbruvica.
By 2021, DiVito had spent $56,000 of its own money on daily birth control pills.
“I was blown away by the co-payments,” said DeVito, who added that she has been on limited income since her husband died in 2023. “I started the first year with $8,500 out of pocket, and went up by about $1,000 every year after that.” “Which.”
The new price cap will apply to all prescription drugs under Medicare Part D; It will not apply to medications given to patients in hospital or other healthcare settings, such as chemotherapy or anaesthesia. Medicare recipients will also have the new option Distribute their payments throughout the yearrather than making a large co-payment all at once.
Before the change, people on Medicare typically had to spend $7,000 or more out-of-pocket on prescription drugs before they qualified for so-called catastrophic coverage, when insurance kicks in and covers most of the cost of the drug. Under this coverage, patients are required to pay a small amount or percentage of the cost of the drug, usually 5%.
DiVito typically obtains catastrophic coverage almost immediately after its plan resets in January each year. While this helped keep costs down for most of the year, it meant that my first few prescriptions were financially painful.
Anticipating the cap next month, DiVito said it is experiencing much less stress and spending a little more freely.
“I will be more generous with my grandchildren this Christmas,” she said.
Millions are expected to benefit
The cap on prices at $2,000 under the Inflation Control Act comes after years of public anger over the high cost of prescription drugs, including cancer drugs, in the United States.
The law introduced the cap gradually, starting with a cap of $3,250 for out-of-pocket spending on prescription drugs in 2024.
More than 65 million people, most of them older adults, are enrolled in Medicare. A study published in September in The JAMA Network is open It found that annual costs for cancer drugs averaged $11,284 for Medicare Part D beneficiaries in 2023. (Part D refers to prescription drug coverage.)
separate Report from the nonprofit group AARP It found that 3.2 million Medicare recipients are expected to see out-of-pocket savings in 2025. By 2029, the number is expected to rise to 4.1 million enrollees. The report did not detail the savings of people with certain conditions, such as cancer. However, research shows About 60% of cancer cases occur In adults 65 and older.
On average, 1.4 million enrollees who reach the expense cap from 2025 to 2029 are expected to see annual savings of $1,000 or more, the AARP report found, and just over 420,000 will see savings of more than $3,000. .
Mary and Jim Scott of Oregon are among those enrolling in Medicare and expect to see savings next year.
In 2023, the couple’s out-of-pocket medical drug expenses rose to $8,000, compared to their previous annual average of $240. It was a difficult year during which Jim, 83, faced several serious health problems, including congestive heart failure, acute kidney injury and bladder cancer.
The new cap will not apply to drugs given in health care facilities (they are covered under Medicare Part B), meaning Jim will still be responsible for chemotherapy costs that are not covered by his insurance.
However, Mary, 73, said the change provides a sense of relief after more than a year of struggling with the rising costs of cancer care, making it easier for the couple to survive and focus on what matters most: Jim’s health and their grandchildren. And their dog and their garden.
“We’re not planning any amazing trips. We still need to live our simple lives,” Mary said. “But by the end of the summer, maybe we’ll be able to put some new aspects in the house and do some of the things we’ve been putting off.”
Living on a fixed income
In the nearly 20 years since Medicare Part D was introduced, there has never been an annual cap on out-of-pocket costs, notes Juliet Kubanski, deputy director of the Medicare Policy Program at KFF, a nonprofit group that researches health policy issues.
she Participate in writing the analysis It found that about 1.5 million people on Medicare had out-of-pocket prescription drug costs exceeding $2,000 in 2021 and would have benefited from the cap. Of the 1.5 million, about 200,000 Medicare enrollees spent $5,000 or more on their prescriptions that year.
“So, for people who need really expensive medications or who take a lot of medications where the monthly cost increases, they may have to pay several thousand dollars out of pocket every year,” she said.
Many people in Medicare are retired and living on a fixed income, which means people often go into debt or even go bankrupt, Kubanski said.
This is especially true for cancer patients: A survey by the American Cancer Society’s Cancer Action Network, published in May, found that nearly Half of cancer patients have medical debt, although most are insured.
“We have many emerging treatments for cancer,” Kaplan said. “It’s very expensive.”
Even for those who don’t spend more than $2,000 a year, the cap is still important, Kubanski said.
“The unfortunate truth is that we are all just one scary diagnosis away from needing expensive medication,” she said.
Is $2,000 a year still too high?
George Valentine, 73, of Philadelphia, said he was getting his annual physical exam in 2002 when his doctor noticed something unusual about his test results. Further tests revealed that he had chronic lymphocytic leukemia.
The medications he needed came at a high price — about $14,000 a month. While he worked in the IT industry, this wasn’t a big problem because his job-based health insurance included the out-of-pocket maximum, which he reached every year.
However, when Valentin retired in 2019, he discovered a major gap in Medicare coverage. Unlike his previous insurance, Medicare had no out-of-pocket spending limit, leaving him responsible for 5% of his drug costs after reaching the catastrophic coverage stage.
“Five percent of $14,000 is a lot of money,” he said. “I would reach the catastrophic stage by February of any given year, and the rest of the year I would have this burden of $700 or so every month and it would never end.”
Valentine, now an advocate for the PAN Foundation, a financial assistance group for patients with life-threatening chronic illnesses, said he would prefer the coverage cap in the new year be “zero.”
He added that with the $2,000 limit, he can now at least sleep at night.
“All that matters is that when it hits $2,000, I’m done,” he said.
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2024-12-25 10:00:40
