Medicare Part D Redesign Savings May Be Lower For Beneficiaries With Spending Below The Out-Of-Pocket Cap

The Medicare prescription drug plan redesign under the Inflation Reduction Act of 2022 aims to simplify the Part D benefit while capping out-of-pocket spending for Part D-covered drugs. Whether and which Medicare beneficiaries will see savings from the redesigned benefit is unclear. We evaluated plan coverage and cost sharing for commonly used brand-name and generic drugs to estimate potential out-of-pocket spending changes for beneficiaries using the same drug and plan in both 2024 and 2025. We found that beneficiaries filling prescriptions for high-cost drugs would have expected mean savings of approximately $1,400 between 2024 and 2005. Beneficiaries who had spending lower than the out-of-pocket cap of $2,000 would have less consistent savings as a result of plans increasing the use of coinsurance versus copayments for preferred brands and increases in premiums among some stand-alone Part D plans. The variability across plans in expected out-of-pocket spending and premiums under the redesigned drug benefit reinforces the need for Medicare beneficiaries to shop for plans that best match their expected medication use.