Seniors in Tennessee benefit from Medicare prescription drug cap

Thanks to the Inflation Reduction Act, Tennessee residents who purchase Medicare health insurance can enjoy big savings next year.

The law caps prescription drug costs for Medicare beneficiaries at $2,000 per year beginning in 2025.

Nina Weiler-Harwell, deputy director of advocacy and community engagement at AARP California, said it is estimated that between three and four million Part D plan enrollees would benefit from the new out-of-pocket cap between 2025 and 2029.

“Medicare drug plan enrollees across the country who meet the new deductible limit will save an average of about $1,500, or 56 percent, on new prescription drugs in 2025,” Weiler-Harwell said.

More than 53,000 Tennessee Medicare Part D enrollees who don't qualify for the low-income subsidy are expected to reach the $2,000 out-of-pocket limit next year. That's about 6.4% of all Tennesseans with a Medicare prescription plan, according to a recent AARP study.

Weiler-Harwell noted that the Inflation Reduction Act introduced a number of new measures to reduce the cost of Medicare health insurance for Americans.

“Copayments for insulin are capped at $35 a month. Shingles and pneumonia vaccinations are free,” Weiler-Harwell explained. “The Inflation Reduction Act has allowed Medicare to negotiate prices for expensive prescription drugs. But we won't really see that until 2026.”

Thanks to the Inflation Reduction Act, pharmaceutical companies must also pay a penalty if they raise their prices more than the inflation rate.