Columnists

Updates on Medicare

Medicare, the national health program for nearly all Americans 65 and older, was created in 1965. As the program evolves, it’s important for senior citizens to stay up to date on the latest developments. 

The biggest change this year is in Medicare’s prescription drug component. 

One part of Medicare — called Part D — was ushered into being by George W. Bush. Passed into law in 2003, it took effect at the start of 2006. Part D helps Medicare beneficiaries pay for self-administered prescription drugs. 

Even with Medicare Part D, many senior citizens were paying thousands of dollars more per year than they can afford — or choosing to forgo medications that could aid their health. To save money, one in five older adults skips doses or doesn’t fill prescriptions, according to a report from the AARP Public Policy Institute. 

Part D is a bit complicated. Each beneficiary signs up for a Part D plan for each calendar year. Each state has its own menu of available plans. All the plans are private. There are often dozens of Part D plans to choose from, and they vary in what they cover and to what extent. The trick is finding a plan that best covers one’s expected medication needs (which, of course, can change at any time). 

When my brother signed up for Medicare, he consulted an expert to help him pick the best Part D plans for himself and his wife. Note that a husband and wife need not choose the same Part D plan. 

No one is required to sign up for Part D, but it is highly recommended. For a modest monthly premium, one gets prescription drug coverage. Without it, one does not get any prescription drug coverage from Medicare. 

One of Joe Biden’s accomplishments as President was implementing an annual limit for out-of-pocket prescription costs for folks on Medicare. It took effect in 2024, with a cap of about $3,300. But 2025 ushers in the era of the $2,000 annual cap. 

This is a big deal. About 11 million people with Medicare Part D are expected to hit the $2,000 cap in 2025 and then will no longer have any out-of-pocket prescription costs the rest of the year. 

Note, this $2,000 cap has restrictions. It applies only to drugs covered by a patient’s Part D plan. It won’t cover experimental drugs that haven’t hit the mainstream. It won’t cover drugs infused into a patient in a medical setting. Plus, it won’t cover every drug in Medicare, for sometimes other Part D plans cover a drug that your own Part D plan doesn’t cover. Plus, it won’t cover drugs that I call “wanted but not needed” — for instance, to grow hair, gain or lose weight, or address fertility deficiencies. 

But for typical Medicare enrollees, the $2,000 cap will be a blessing. 

The other big change to Medicare given to us by the Biden administration is enabling Medicare to negotiate drug prices with drug manufacturers. Medicare is so huge it has the clout to negotiate these prices, but until Biden came along it never had the authority. 

Legislation to allow for price negotiations was passed in 2022. But it will take time. Although negotiations have taken place, the reduced prices for the first 10 drugs chosen for the program don’t kick into effect until the start of 2026. (The drugs are Eliquis, Enbrel, Entresto, Farxiga, Imbruvica, Januvia, Jardiance, Stelara, Xarelto, and various insulin pens marketed as Fiasp or Novolog.) Federal officials picked those 10 drugs from a list of 50 medications that Medicare Part D spends the most on and are among the most used. 

Fifteen additional drugs were announced this month by Medicare for price negotiations that will take place this year, with the reduced prices to take effect at the start of 2027. 

The 15 drugs for which Medicare will negotiate lower prices that will take effect in 2027 are: Austedo/Austedo XR, Breo Ellipta, Calquence, Ibrance, Janumet/Janumet XR, Linzess, Ofev, Otezla, Ozempic/Rybelsus/Wegovy, Pomalyst, Tradjenta, Trelegy Ellipta, Vraylar, Xifaxan, and Xtandi. 

In the future, another round of price negotiations for 15 more drugs (yet to be chosen) will take place.  Then up to 20 more drugs per negotiation cycle afterward. 

Because the authorization for all these changes was approved by Congress in 2022 as part of the Inflation Reduction Act, it would take an act of Congress to overturn them. No mere executive order by a President can do so.  

Personally, I’m delighted by these changes. But I’m biased. The drug I take daily to avoid frequent hospitalization (or worse) is on the new list of 15 drugs that will have lower prices come 2027 — coincidentally, the year I’ll enroll in Medicare. 

Sometimes the government does good. 

In its ridiculously complicated way.