WASHINGTON — Medicare officials are offering private insurers big subsidies to keep premiums for prescription-drug plans stable as the elections approach.
The Inflation Reduction Act, passed by Democrats in 2022, made several changes to Medicare’s drug benefit, known as Medicare Part D. All were aimed at lowering drug prices and drug costs for both seniors and the federal government. The most well-known policies cap annual out-of-pocket drug costs for seniors, limit their monthly insulin costs, and direct Medicare to negotiate drug prices.
The law also made changes to Medicare Part D that matter to insurers but aren’t well-known to the general public. Among them, insurers now must pay a much greater share of seniors’ catastrophic drug costs, which are out-of-pocket costs that exceed $2,000, starting next year. The federal government used to cover the vast majority of those costs.
