Do I still need Part D after Congress made changes to Medicare?


Q. With Congress passing the new provisions where Medicare can negotiate drug prices and there is a cap for what seniors pay out-of-pocket, what does this mean for my Part D plan? Will I not need it anymore?
— Senior

A. We’re glad you asked.

Don’t get rid of your Medicare Part D plan.

The changes that are coming to Medicare prescription costs are in no way meant to eliminate the need for the protection that is provided by those plans, said Claudia Mott, a certified financial planner with Epona Financial Solutions in Basking Ridge.

“The recently passed Inflation Reduction Act (IRA) of 2022 included a number of provisions whose intention is to help reduce health care costs, especially those related to prescriptions,” she said. “But like many legislative acts, the changes don’t start immediately and some won’t be in place for a couple of years.”

Among the changes are that insulin copays will be capped at $35 per month starting in 2023. Also in 2023, cost-sharing for vaccines such as for shingles will be eliminated.

Medicare will require companies to pay a rebate when drug costs rise more quickly than inflation, Mott said. This will also take effect in 2023.
Access to Part D Low-Income Subsidies, known as “Extra Help,” will be expanded through a new definition of income eligibility starting in 2024.

Out-of-pocket responsibilities for catastrophic prescription medications to be capped beginning in 2024, with a $2,000 out-of-pocket limit in effect in 2025, she said.

And as you noted, Medicare will be able to negotiate prices for the most widely used high-cost drugs, but that won’t start until 2026, she said.

The new law also extended some of the health care premium subsidies related to the Affordable Care Act that were set to expire this year, Mott said. The extension will help some save on premiums and will enable others to be able to afford to enroll in a health care insurance plan.

“While the savings an individual might realize from these various changes is hard to quantify, it’s likely that most Part D prescription plan holders will find a few more dollars in their pockets for one reason or another,” Mott said.

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This story was originally published on Oct. 11, 2022. presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.