This year has ushered in new laws designed to limit drug costs for many Americans. Those requiring insulin may benefit from significant pharmaceutical price adjustments and discounts. Medicare beneficiaries can expect big changes in 2024 and 2025, capping out-of-pocket costs; meanwhile, by implementing simple strategies, anyone may lower drug costs regardless of their insurance policy. Read on for information about what’s new in 2024 and tips for controlling medication expenses.
How are prescription drug prices regulated?
There has been very little regulation to stop the soaring costs of prescription medications in the United States. Drug companies, pharmacy benefit managers, and health insurers negotiate and set prices. Costs have continued to rise.
As a result of high out-of-pocket drug costs, people may choose to skip or divide medication doses, hoping to prolong a prescription. Still, others must decide between purchasing medications or paying for necessities like food or housing. Total costs can vary depending on a person’s health, insurance benefits, copays, deductibles, coinsurance, and out-of-pocket maximums.
However, in 2022, the Inflation Reduction Act (IRA) was passed, and new laws aimed at combatting rising medication costs came into effect in 2023, 2024, and 2025.
How does the IRA affect medication costs?
The Inflation Reduction Act allows Medicare to negotiate lower prescription drug rates with pharmaceutical companies. Pharmaceutical companies increasing medication prices faster than the inflation rate must pay rebates to Medicare. The ultimate goal is to ensure medications remain affordable and accessible to millions of Americans.
Some beneficiaries may have started seeing lower costs during 2023; however, Medicare enrollees can expect to save thousands of dollars by paying less coinsurance than they would have previously as more changes become effective in 2024 and 2025.
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What is new in 2024 prescription drug coverage?
Effective January 2024, new laws are easing costs for some Americans. Legislation and public pressure have influenced some of the following changes:
New insulin costs
Insulin costs are capped at $35 per month for Medicare Part D enrollees. A three-month supply of insulin cannot exceed $105. For people with insulin pumps covered under Medicare Part B (durable medical equipment), monthly insulin costs cannot exceed $35.
Medicaid enrollees can get insulin for free or at a reduced cost, but it can vary between states. Check with your state coverage for more information.
Insulin coverage under commercial plans can vary widely. However, in 2023 and 2024, the three major insulin-producing companies, including Eli Lilly, Novo Nordisk, and Sanofi, have instituted cost-saving programs for eligible patients. Although some cost reductions began in 2023, others became effective on January 1, 2024, meaning more Americans will access insulin for $35 monthly. The American Diabetes Association website is a good resource for detailed information regarding insulin coverage.
Medicare Part B
Starting January 1, 2024, 48 Medicare Part B drugs will have lower co-insurance prices. Enrollees may see savings anywhere from $1 to $2,786 per dose. You can find the list on the CMS website. Ten more medications, including Eliquis, Jardiance, and Xarelto, will enter price negotiations in 2024.
Eliminating Medicare Part D catastrophic coinsurance
On January 1, 2024, Medicare enrollees reaching the catastrophic level of Medicare Part D will no longer pay the 5% coinsurance. This change capped out-of-pocket costs. For example, beneficiaries who require certain high-cost cancer treatment medications could save thousands of dollars. According to the KFF, annual out-of-pocket Part D maximums in 2024 could be $ 3,300 and may drop to $2,000 annually in 2025. Previously, there was no cap, and many people could have drug costs in the thousands of dollars. Once you reach the cap, you are done paying coinsurance for Part D.
Some states may consider legislation dealing with high medication prices. Future legislative changes could possibly reduce medication costs for millions more Americans. Keeping current on potential legislative changes in your state could save you money.
How can I reduce my prescription medication costs?
Americans pay more for prescription medications than people in other countries, but saving money is possible if you utilize some of the following strategies.
Get a copy of your prescription drug list
Ask for a copy of your policy’s prescription drug list. A prescription drug list, also called a formulary, lists covered medications, estimated costs, in-network pharmacies, and pre-approval requirements. Contact your health plan representative or website for specific information. You can also check and compare drug coverage benefits before changing plans.
Consider medication changes
Some medications are more costly than others, and insurance coverage varies between policies. A generic drug like Atorvastatin may have cheaper out-of-pocket costs than its brand name, Lipitor. Talk to your doctor, especially if you are struggling with costs. A physician could order a different but effective medication with better insurance coverage. Switching to generic or bio-similar versions of brand-name drugs could save money. Most healthcare providers will work with you to ensure the best possible treatment at an affordable price.
Healthcare providers like doctors, physician assistants, and nurse practitioners care for people daily. Although they may generally know what most plans cover, they cannot know the details of every patient's prescription drug benefits. It is up to you to clarify your policy details and follow up with your physician or other health provider.
Medication prices vary between pharmacies, and it’s worth shopping around. Although insurance may limit you to in-network pharmacies, you can use a website like Good RX to compare medication prices at local pharmacies. Big box store membership clubs like Costco may offer savings for shoppers. Meanwhile, Walgreens, a popular U.S. pharmacy, provides options for a Walgreen Prescription Savings Club. Subscribers pay $20 per year to save on more than 8,000 medications. For example, a 30 supply of Amlodipine (generic Norvasc) is reduced from $43.99 to $10 with a subscription. Savings are available for insured and uninsured individuals.
Additionally, mail-order pharmacies can save money, and some policies will offer discounts for 90-day supplies. An insurance policy could limit your choice of mail-order pharmacies. Amazon Pharmacy‘s website states they accept most insurance plans and offer discounted prices for people with and without insurance. Cost Plus Drugs, a Mark Cuban company, promises lower drug costs, potentially saving people thousands of dollars by cutting out the middleman and offering transparency with pricing.
Use coupons, manufacturer discounts, and financial assistance
Programs like Good RX have free coupons on their website or app to get discounts at local pharmacies.
Drug manufacturers frequently offer copay cards or patient assistance programs, helping eligible Americans obtain low-cost or discounted medications. Some discounts will have requirements for eligibility, but you may still qualify if you have insurance. Check out manufacturer websites and use a tool like RXassist.org to search for assistance.
The PAN Foundation supports people with serious health conditions by providing grants for life-saving medications. You need to meet eligibility requirements, which vary depending on the disease condition and type of grant. Go to the PAN Foundation website for more information.
Use your HSA
If you have a health savings account (HSA), you can use this money to help cover medication expenses. A HSA provides tax benefits and allows you to save and budget for medical expenses. Combining an HSA with discount coupons can help you maximize your healthcare dollars.
Many people rely on prescription medications to manage chronic conditions and for life-saving treatments. Access to affordable medicines without breaking the bank or forgoing other necessities should be a priority for a healthy, productive nation. Luckily, in 2024, the Inflation Reduction Act contains new laws focused on helping millions of Americans afford and continue to access critical medications. Additionally, with some research and strategy, resources are available to help people save money and manage medication expenses in 2024.
Some types of insulin have been capped at $35 per month due in part to new laws and changes to pharmaceutical company pricing.
On January 1, 2024, the Inflation Reduction Act (IRA) eliminated a 5% coinsurance for people reaching the catastrophic benefit level of Medicare Part D, potentially saving many Americans thousands of dollars.
Americans can utilize several smart strategies, like changing medications, comparing pharmacy prices, and taking advantage of financial assistance to lower overall medication expenses in 2024.
- Medicare.gov. Saving money with the prescription drug law.
- Centers for Medicare and Medicaid Services. Reduced coinsurance for certain Part B rebatable drugs.
- KFF.org. Changes to Medicare Part D in 2024 and 2025 under the Inflation Reduction Act and how enrollees will benefit.
- US Department of Health and Human Services. New HHS actions and research highlight how president Biden's administration is lowering prescription drug costs.
- Medicare.gov. 5 ways to get help with prescription costs.