Starting on Wednesday, January 1st, Americans with Medicare will benefit from a $2,000 out-of-pocket spending cap on prescription drugs thanks to President Biden’s Inflation Reduction Act. That means that 19 million seniors and people with disabilities with Medicare are expected to save an average of $400 per year, in addition to savings from other provisions of the law. In August, the Biden-Harris Administration announced lower prescription prices for the first ten drugs that have been negotiated by Medicare. These new, lower prices take effect in 2026, and will cut the price of some of the most expensive and most commonly used drugs nearly 40 and 80%.
Today’s action builds on the progress the Biden-Harris Administration has already made lowering health care costs, including the Inflation Reduction Act’s $35 insulin cap, making recommended vaccines free for seniors, and requiring drug companies to pay a rebate when they raiseprescription prices faster than the rate of inflation. President Biden took on Big Pharma and won and because of this law, costs are going down for drugs that treat heart disease, cancer, diabetes, blood clots, and more
State-by-state information on savings associated with the $2,000 cap is available in the following report (see table 12). https://aspe.hhs.gov/sites/default/files/documents/1b652899fb99dd7e6e0edebbcc917cc8/aspe-part-d-oop.pdf
“I believe that health care should be a right – not a privilege – and throughout my presidency I have advanced that goal. This week, we take another step closer to an America where everyone can afford the quality health care they need, as Medicare’s new $2,000 cap on prescription drug costs from my Inflation Reduction Act goes fully into effect.
“Before I took office, people with Medicare who took expensive drugs could face a crushing burden, paying $10,000 a year or more in copays for the drugs they need to stay alive. When I took on Big Pharma and won, we changed that, capping seniors’ out-of-pocket spending on drugs they get at the pharmacy for the first time ever. Costs were capped at about $3,500 in 2024, and in just the first six months of the year, this policy saved people with Medicare $1 billion in cost-sharing. On January 1, 2025, the cap on drug costs fully phases in, and costs are now capped at $2,000 per year. As a result, 19 million people are expected to save an average of $400 each. That’s a game changer for the American people.
“My Inflation Reduction Act has changed Medicare for the better, and as a result Americans will have more money back in their pockets in the years to come.”