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The Inflation Reduction Act of 2022 (IRA) includes several cost-reduction provisions to Medicare Part D plans that are designed to help beneficiaries but may also impact employer-sponsored health plans.

Key benefits include the following:

  • Insulin is available at $35 per month per covered prescription, and recommended adult vaccines are available without cost sharing;
  • There is a yearly cap of $2,000 on out-of-pocket Medicare Part D prescription drug costs; and
  • All Medicare Part D plans are required to offer enrollees the option to pay out-of-pocket prescription drug costs in the form of capped monthly installments through the Medicare Prescription Payment Plan instead of all at once at the pharmacy.

Lower Medicare costs could mean higher costs for employers that provide prescription drug coverage as pharmacies and providers seek to make up for lost revenue by increasing costs in the private sector. The changes may also affect the creditable coverage status of employer-sponsored prescription drug coverage.

Employers and their benefit advisors should take proactive steps to manage costs should these increases occur and develop cost containment strategies, if necessary. In addition, employers should continue to monitor for guidance on the creditable coverage determination methods for calendar year 2026 to prepare for any changes in the methodologies.

More information, including links to available resources and the latest updates, can be found on the Centers for Medicare and Medicaid Services’ (CMS) Part D Improvements webpage.

For a copy of this notice, click here: IRA Changes to Medicare Part D May Impact Employer Plans

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