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The IRA, a significant piece of legislation passed by Congress, aims to tackle rising inflation in the healthcare sector. Its provisions promise to bring about changes directly impacting millions of Medicare beneficiaries enrolled in Part D prescription drug plans.
In this article, we delve into the key aspects of the IRA and its potential implications for Medicare Part D beneficiaries in the coming year.
Let’s uncover the ways in which this Act aims to streamline drug benefits, curb costs, and improve overall healthcare access for seniors and individuals with disabilities.
Inflation Reduction Act Medicare Part D changes
The Inflation Reduction Act (IRA) brings several changes to Medicare Part D for the year 2024. These changes aim to reduce inflation and improve the standard Part D drug benefit defined in the Social Security Act. The specific changes are as follows:
- Elimination of Cost-sharing for Catastrophic Coverage
When you reach the catastrophic coverage phase, you won’t have to worry about paying any cost-sharing for your Part D prescription drugs.
So, once you hit that catastrophic coverage threshold, you’ll only need to make a small copayment or coinsurance for your medications. It’s a significant relief for those with high drug costs, as it ensures that you won’t be burdened with excessive out-of-pocket expenses.
- Expanded Low-Income Subsidy Program (LIS)
If you earn between 135 and 150 percent of the federal poverty level and meet the resource limit requirements, you’re in for some good news. The IRA has expanded the Low-Income Subsidy program (LIS) under Part D to include more people.
Previously, only beneficiaries earning less than 135 percent of the federal poverty level could enjoy full LIS subsidies. But now, with the expanded LIS, many people will get amazing benefits like $0 premiums for prescription drug coverage. Moreover, not only will your premiums be covered, but you’ll also get low-cost, fixed copayments for all your covered prescription drugs.
The IRA is working hard to ensure you can access the medications you need without breaking the bank.
- Changes in Part D Coverage for Insulin Products and Vaccines
Starting in CY 2024, you won’t have to worry about Part D plan deductibles for any insulin product. That means you can access your vital insulin without meeting a deductible first.
Apart from that, the IRA ensures that Part D plans won’t charge you more than $35 per month’s supply of covered insulin products during the initial and coverage gap phases. It will help you to keep your costs in check, no matter what stage of the coverage you’re in.
And here’s the cherry on top: Part D plans won’t apply the deductible to any adult vaccine recommended by the Advisory Committee on Immunization Practices. No need to worry about a deductible when you’re taking steps to protect your health through vaccinations.
But it doesn’t stop there! The IRA also takes care of your wallet when it comes to vaccines. Part D plans won’t charge you any cost-sharing at any point in the benefit for those recommended adult vaccines.
- Cap on Annual Growth in Base Beneficiary Premium
In 2024, the Inflation Reduction Act (IRA) is putting a cap on Part D premiums. The Base Beneficiary Premium growth will be limited to 6 percent annually.
That means beneficiaries won’t face premium increases beyond 6 percent or the amount that would have been without the IRA. It’s a safeguard to control premium costs and ensure affordable healthcare for Medicare Part D recipients.
With this cap in place, seniors and individuals with disabilities can have more predictability and stability in their Part D premiums starting next year.
Additional provisions and changes in 2024
In addition to the changes mentioned earlier, the 2024 Medicare Part D program includes some other provisions and updates that will impact beneficiaries and improve the overall program. These additional provisions are as follows:
- Part C and D Star Ratings Updates
The 2024 Rate Announcement includes updates to the Star Ratings for Part C and Part D plans. The Star Ratings play a crucial role in quality bonus payments to plans. While the specific details are not mentioned in the provided information, these updates aim to ensure the quality of care provided by Medicare Advantage and Part D plans and encourage better performance.
- Part C Risk Adjustment Model Revision
CMS has finalized the proposed Part C risk adjustment model for 2024. This revised model includes technical updates, such as restructured condition categories using the ICD-10 classification system and updated underlying FFS data years.
These revisions are designed to improve the accuracy of risk assessment and payment to Medicare Advantage plans, ensuring that plans receive adequate compensation for the healthcare needs of their enrollees.
- MA Risk Score Trend
The MA risk score trend is an important factor in determining the level of overall Medicare Advantage payments. It reflects the average increase in MA risk scores, which is driven by MA diagnosis coding patterns. The trend is calculated using data on MA risk scores over the most recent three years and is an industry average.
For 2024, the risk score trend is projected to be 4.44%, considering the phase-in of the finalized 2024 risk adjustment model. This trend helps ensure that payments to MA plans align with the expected cost of providing beneficiaries care.
- Growth Rates and Effective Growth Rate
The Effective Growth Rate reflects the current estimate of the growth in benchmarks used to determine payment for Medicare Advantage plans. The growth rate is largely driven by the growth in Medicare Fee-For-Service (FFS) per capita costs.
CMS applies technical adjustments related to indirect and direct medical education costs associated with services furnished to MA enrollees. The Effective Growth Rate for 2024 is projected to be 2.28%.
- Provisions for Puerto Rico
The Rate Announcement considers the unique circumstances of Medicare beneficiaries in Puerto Rico, where a larger proportion of beneficiaries receive benefits through Medicare Advantage compared to other states and territories.
The policies proposed and finalized for 2024 aim to provide stability for the MA program in Puerto Rico and account for the relatively higher costs of beneficiaries in FFS with both Medicare Parts A and B and the higher percentage of beneficiaries in Puerto Rico with zero claims.
How does the Inflation Reduction Act affect Medicare?
The Inflation Reduction Act (IRA) is making some remarkable changes to Medicare that will help beneficiaries in the Medicare Part D program.
They’re eliminating cost-sharing for catastrophic coverage, which means fewer out-of-pocket expenses for those who really need it. Plus, they’re expanding the Low-Income Subsidy program to help more lower-income people get better prescription drug access.
The IRA also improves payment accuracy so that Medicare Advantage plans can give better care. And guess what? The growth in premiums will be capped, keeping costs in check. It’s all about making Medicare better for everyone!
Conclusion
The Inflation Reduction Act (IRA) brings several positive changes to Medicare Part D for 2024. These changes aim to reduce inflation and enhance the standard Part D drug benefit, ultimately benefiting Medicare beneficiaries.
We encourage all readers to stay informed about Medicare updates and take advantage of the enhanced benefits in 2024. By being aware of these changes, beneficiaries can make informed decisions about their healthcare coverage and make the most of the improved offerings in the Medicare Part D program. If you are looking for a Prescription Drug Plan (Part D) for 2024, be sure to check comparison plan sites such as Hella Health’s Medicare Personal Shopper.
