Changes in Medication Use After Medicare Part D Annual Out-of-Pocket Spending Caps

The Inflation Reduction Act (IRA) implemented annual out-of-pocket spending caps to the Medicare Part D prescription medication benefit in 2024; the caps were lowered to $2000 in 2025. It remains unclear how this policy affected medication access.

To evaluate changes in prescription medication fills in the Medicare population after the implementation of the IRA.

This study used data from an all-payer pharmacy database (Symphony Health Metys) to evaluate changes in quarterly prescription fills for medications reimbursed by Medicare and commercial insurance from 2022 to 2025. Using an event study, difference-in-differences framework, changes in per-capita prescriptions for medications before and after the Medicare annual out-of-pocket spending caps were implemented in 2024 were compared. Because out-of-pocket caps are most relevant for patients using expensive medications, medications were stratified based on monthly cost: low (<$100), medium ($100-$829), high ($830-$6999), and very high (≥$7000).

Quarterly per-capita fills by medication.

Among 3053 medications covering 92.9% of gross Medicare Part D spending in 2023, 1534 (50.2%) were low cost, 882 (28.9%) were medium cost, 455 (14.9%) were high cost, and 182 (6.0%) were very high cost. After the spending caps were implemented, average medication use increased in Medicare compared with medication use in commercial insurance, with larger increases for higher-cost medications. In pre-post difference-in-differences analyses, there was no change in Medicare vs commercial use of low-cost, medium-cost, or high-cost medications. Very-high-cost medication use increased by 22.7% (95% CI, 6.0% to 42.0%; P = .01). Use of medications in Medicare increased over time in event-study analyses, although CIs were wide; by the fourth quarter of 2025, the use of medications in Medicare compared with commercial insurance increased from baseline by 4.1% (95% CI, -3.4% to 12.3%) for low-cost medications, 20.7% (95% CI, -10.7% to 63.0%) for medium-cost medications, 23.1% (95% CI, 2.7% to 47.4%) for high-cost medications, and 35.9% (95% CI, -4.1% to 92.3%) for very-high-cost medications.

This study found that medication use increased after implementation of Medicare annual out-of-pocket cost caps, particularly among the highest-cost medications. These results suggest that the policy substantially improved patient access to high-cost medications for Medicare-insured patients.