The Inflation Reduction Act: How Will it Affect Your 2023 Medical Expenses?
We have seen many buzzwords come and go in the last two years. Social distancing, mask mandates and even TikTok come to mind. But this year, one word has dominated the rest: inflation.
Whether you’re talking about gas or groceries, inflation and its ill effects seem to leach into every conversation. And chances are, you’re thinking about the impact on your budget even when you aren’t talking about the economy.
What effect is rising inflation having on seniors?
According to a recent study, 80% of Americans over the age of 50 are worried about inflation. Why? Because they don’t want their healthcare costs to increase! A whopping 95% of seniors concerned about inflation said they’re afraid rising prices will mean an increase in medical expenses.
Consumer prices have increased by about 9% since this time last year, and healthcare costs could similarly rise. Fortunately, the Inflation Reduction Act was recently passed by Congress to curb these costs and prevent inflation from further impacting seniors’ medical expenses.
How does the Inflation Reduction Act affect seniors?
Whether you’re aware of this new law or not, you probably have many questions about how this legislation impacts Medicare coverage and costs. Here’s what you need to know about the Inflation Reduction Act’s effect on seniors.
Does the Inflation Reduction Act eliminate the donut hole?
The donut hole, which is where Part D coverage drops off and catastrophic coverage doesn’t kick in, is an expensive place to be. For most beneficiaries, getting stuck in the donut hole costs between $2,000 and $3,000, a price tag few seniors can reasonably afford.
Fortunately, the Inflation Reduction Act has eliminated the perilous donut hole by capping Medicare beneficiaries’ Part D out-of-pocket spending. In addition, the law eliminates coinsurance above the catastrophic threshold starting in 2024. Those who’ve fallen into the Part D donut hole know the significance of this change!
The efforts to close the donut hole also include a provision to cap annual out-of-pocket prescription drug costs at $2,000. The spending cap takes effect in 2025 and will lower costs for 1.4 million seniors annually.
Will the Inflation Reduction Act cap insulin copays?
Yes, the Inflation Reduction Act caps insulin copays. You read that correctly! In 2023 and beyond, out-of-pocket insulin costs will be capped at $35 a month. If you’re one of the nearly one in three Americans over 65 who have diabetes, this is great news.
Right now, the average diabetic patient spends about $54 out of pocket every month for insulin injections. So this cost control will save Medicare Part D beneficiaries who use insulin products several hundred dollars a year.
Is expanded vaccine coverage part of the Inflation Reduction Act?
Although vaccines have likely been a part of your healthcare regimen since you were born, you probably haven’t thought about them as much as you have in the last two years. But for decades leading up to now, vaccines have been saving lives and protecting individuals from serious illnesses.
Thanks to the Inflation Reduction Act, you won’t have to pay out of pocket for this life-saving protection. As part of this legislation, Medicare beneficiaries will enjoy $0 copays for vaccines covered by Medicare Part D plans starting next year.
Eliminating vaccine copays is fundamental to curbing the spread of COVID-19 and reducing the effects of other harmful viruses.
How does the Inflation Reduction Act help low-income seniors?
If you’re in the 9.5% of seniors who live below the poverty line, the Inflation Reduction Act offers some special protections to curb the effects of inflation on your access to quality healthcare.
Right now, you may be enrolled in a partial low-income subsidy that enables you to pay subsidized premiums and copays for your Medicare Part D plan. But in 2024 and beyond, you’ll be offered a full low-income subsidy that could lower your annual out-of-pocket costs to as little as $300 a year.
There’s no questioning the effects of inflation. And even though you may still wonder how the volatile economy will impact your retirement and other assets, rest assured your Medicare Part D plan will give you more coverage, not less.
If you have questions about the Inflation Reduction Act, contact us at 877.255.6273 to learn more.
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