Several items of interest have entered the public conversation about Medicare in the last couple of months, so let’s take a look at some of the important ones.
The Inflation Reduction Act (yes, yes — we have heard all the “ha-ha” remarks about the name), which in addition to large amounts of new spending, contained a significant number of new elements that concern Medicare. A few of these have already been implemented:: requirement that drug companies pay rebates on pricing that exceeds inflation; limitation to monthly insulin drug costs to $35 for all companies; $0 cost for all vaccines.
In 2024, the IRA, eliminates the 5% (greater of ) cost from drug plans in favor of simple copays, and increases the eligibility for low income subsidies (LIS – or Extra Help) to 150% of the federal poverty level. Also, in 2024, and beyond, drug price increases will be capped at 6% per year.
The BIG programs for Medicare that grow out of the IRA come in 2025 and 2026, and beyond. Specifically, in 2025, the maximum out-of-pocket cost for Part D drugs will be capped at $2000. Secondly, CMS will start to negotiate the cost of high priced drugs that are approved for use in the Medicare program, introducing the limitations beginning in 2026, running through 2030 for a total of 50-60 drugs (Part D initially, expanding to both Part B and Part D drugs). CMS will target a fraction of this 50+ drugs each year, but will not do all of them at once.
The IRA legislation was written with the caveat/assertion that the cost savings realized (CMS subsidizes the cost of some drugs within the Part D program), will “pay for” the implementation of the $2000 out-of-pocket cap.
Several weeks ago, CMS released a list of the first 10 drugs to be negotiated. The Wall Street Journal published an examination of the list and the process on 8/29/2023::
DRUGS TARGETED FOR MEDICARE PRICE NEGOTIATIONS
For a bit of background and context, several countries that have centralized health care delivery systems, also establish the maximum price for drugs that they will pay, while also limiting the availability of certain medications that do not conform to their cost guidelines.
So, this list of 10 meds, will have negotiated pricing taking effect in 2026. In a call with CMS during the week of 9/4/2023, it was learned that the process, which has commenced, will first involve interactions between CMS and the manufacturers, with the manufacturers having until the first of October this year to indicate if they will participate.
If a manufacturer refuses to participate they face a tax of 95% on sales of the medication or remove the medication from US Medicare/Medicaid sales.
First stakeholder public hearings will be held during the last week of October and the first week of November, 2024. CMS will release the “negotiated” price results sometime in early January 2025. It is quite likely that some of the manufacturers will test the limits of the legislation in court, and we will very soon see if any of the manufacturers of the medications listed will refuse to participate in negotiations.
Setting up Your MyMedicare Account
In the same way you set up your MySocialSecurity account, you also can create a MyMedicare account for yourself. The account will let you see everything about your Medicare information, and perform various services for yourself, including ordering a new Medicare card, should yours be lost or stolen; order a customized “Medicare & You” booklet each year; and view costs and payments as well as keep track of your drug list.
If you haven’t created a MyMedicare account, go to Medicare.gov. Then select the tile on the far left:: Log In or Create An Account
Click on the button to “Create Account”. There are no restrictions at this time on using the same login credentials as you use for your MySocialSecurity account, but you can likely achieve great security by selecting a unique login. Whatever the situation you chose ,make certain that you save these credentials somewhere secure. Recovering your login information is not nearly as simple as you may be used to for other accounts.
Once you have created or signed into your account, you will find easy access links to all of your Medicare information, and to tools such as storing your medication list.
R Allan Jensen