The Inflation Reduction Act (IRA) aimed to lower prescription drug costs by capping annual out-of-pocket spending for Medicare beneficiaries at $2,000 and eliminating the “coverage gap” for those with moderate drug expenses. However, a new white paper from the USC Schaeffer Center for Health Policy & Economics suggests that, for many beneficiaries, it may lead to higher costs.
According to the analysis, changes in Part D plan design are shifting more costs onto patients through rising annual deductibles and a transition from fixed copays for common brand-name drugs to a coinsurance, which requires patients to pay a percentage of a drug’s list price, which often results in significantly higher out-of-pocket costs. While the IRA’s new annual out-of-pocket cap may benefit those with the highest drug expenses, the report warns that the majority of Medicare beneficiaries may end up paying more overall due to these changes.
Last Updated on June 26, 2025 by Aimed Alliance
