Medicare Part D Redesign Savings May Be Lower For Beneficiaries With Spending Below The Out-Of-Pocket Cap

This is the authors' abstract. We don't add key points for this paper.

The Medicare prescription drug plan redesign under the Inflation Reduction Act of 2022 aims to simplify the Part D benefit while capping out-of-pocket spending for Part D-covered drugs. Whether and which Medicare beneficiaries will see savings from the redesigned benefit is unclear. We evaluated plan coverage and cost sharing for commonly used brand-name and generic drugs to estimate potential out-of-pocket spending changes for beneficiaries using the same drug and plan in both 2024 and 2025. We found that beneficiaries filling prescriptions for high-cost drugs would have expected mean savings of approximately $1,400 between 2024 and 2005. Beneficiaries who had spending lower than the out-of-pocket cap of $2,000 would have less consistent savings as a result of plans increasing the use of coinsurance versus copayments for preferred brands and increases in premiums among some stand-alone Part D plans. The variability across plans in expected out-of-pocket spending and premiums under the redesigned drug benefit reinforces the need for Medicare beneficiaries to shop for plans that best match their expected medication use.