Mary Helen Gillespie is the author of "The Last Post."
As a result of President Biden's broad and politically divisive measure, Medicare beneficiaries will begin to see a series of cost reductions in certain prescription medication prices from next year.
As the key midterm elections approach, Biden and other Democrats consider the Inflation Reduction Act, which aims to address climate, health, and tax reform, to be a huge victory. No Republican from neither chamber voted for the $750 billion measure last week, claiming it would cause inflation to rise and be ineffective.
After Labor Day, the president signed the bill with the usual pomp and circumstance in the White House State Dining Room. He and party leaders are planning a major cross-country road show aimed at Senate and congressional districts in danger of being flipped to the GOP in the November elections.
Seniors will pay less for prescription charges. This is a Godsend to many families and is so, so long overdue, according to the president, adding that it was one of the most significant laws in our history.
Here's how this affects Medicare programs, particularly focusing on drug costs.
People who have serious illnesses like cancer frequently skip medication or forget to fill a prescription because to financial reasons. Having a strict out-of-pocket spending limit will allow people on Medicare to budget for their medications and give them peace of mind that they will not have to spend unlimited amounts on medications prescribed by their physicians.
While the insulin component has garnered a great deal of immediate positive feedback from patients and providers, many experts believe the $2,000 cap will have the greatest impact on Medicare recipients, who may now be paying thousands and thousands of dollars for lifesaving medications for cancer and other serious medical conditions.
GH2 Benefits LLC is led by Jae W. Oh, MBA, CFP, CLU. Oh, the author of Maximize Your Medicare, believes the $2,000 cap will transform the financial landscape for all Medicare beneficiaries.
Oh said the elimination of the catastrophic stage is a clear victory. Costs that may be widely variable year-over-year are now very real. Seniors who check-in on Social Security will be able to plan. People will accept it with open arms.
Sudipto Banerjee, PhD, vice president of retirement thought leadership at T. Rowe Price, agreed that the $2,000 cap would have the greatest impact on seniors' prescription budgets. However, he noted that data does not reveal what percentage of Medicare enrollees is.
He is the author of a recent T. Rowe Price paper that examines health-care costs in retirement, which states that some studies estimate that a 65-year-old couple might need up to $360,000 to cover these expenses. But these estimates do not provide an accurate picture of what most retirees will face in their future health problems.
Because, according to Banerjee, the new bill will help lower Medicare costs, but it ignores the greatest possible expenses seniors may face as they prepare for retirement: long-term care. This new legislation does not address the danger of high long-term care expenses, according to Banerjee.
The research advises against considering health-care retirement costs.
- Calculating premiums based on the type of coverage and budgeting for that amount in the fixed monthly income.
- Keeping enough liquid cash to meet outofpocket expenses.
The Kaiser Family Foundations Neuman cautioned that the Medicare changes would have an impact on seniors' premium costs.
The effect of the new Medicare Part D premiums isn't completely clear. Some provisions increase Medicare Part D expenditure, while others lower expenditure, according to Neuman. The legislation prohibits Part D premium increases to no more than 6% per year, effectively keeping the lid on future increases between 2024 and 2030.