Understanding the Inflation Reduction Act and new regulations
It is crucial to understand the Inflation Reduction Act and the potential Part D changes that will impact both you and your clients this upcoming Annual Enrollment Period (AEP).
Section Links
1.) IRA Overview
2.) Official CMS Links
3.) Inflation Reduction Act Articles
4.) Client Marketing Outreach
5.) Additional Resources
1.) IRA Overview
The Inflation Reduction Act introduces several key provisions aimed at reducing healthcare costs for Medicare beneficiaries. These provisions are designed to make prescription drugs more affordable and improve overall healthcare access for seniors and people with disabilities.
These key changes include:
Elimination of the Part D coverage gap: Ensuring continuous prescription drug coverage throughout the year starting in 2025.
Capping annual out-of-pocket drug costs: Setting a limit of $2,000 on out-of-pocket expenses for prescription drugs, providing significant financial relief.
Lowering insulin costs: Capping the cost of insulin at $35 per month for Medicare beneficiaries.
Expanding access to Extra Help subsidies: Increasing eligibility for low-income beneficiaries to receive assistance with Part D premiums, deductibles, and cost-sharing.
Phasing out 5% coinsurance for catastrophic coverage: Shifting more responsibility to Part D plan providers to cover these costs, which impacts premium calculations.
The Inflation Reduction Act is expected to increase Part D premiums in 2024 due to the elimination of the 5% coinsurance for catastrophic coverage and the added responsibility for plan providers to cover higher costs. However, starting in 2025, the act will cap annual out-of-pocket drug expenses at $2,000, potentially stabilizing costs for beneficiaries in the long term.
2.) Official CMS Links
View important CMS announcements below:
- Inflation Reduction Act and Medicare
- Medicare Prescription Payment Plan
- CMS Releases 2025 Medicare Part D Bid Information and Announces Premium Stabilization Demonstration
- Prescription Payment Plan Fact Sheet
- Prescription Payment Plan Timeline
- CMS Part D Redesign Program Instructions
- CMS Part D Redesign Fact Sheet
3.) Helpful IRA Articles
Helpful articles from PSM and around the web:
4.) Client Marketing Outreach
In preparation for these changes, we have developed some helpful resources you can use to engage your clients and take a pro-active approach.
For insurance agents, the changes brought by the Inflation Reduction Act (IRA) mean you must be proactive and well-informed to assist your clients.
The increase in Part D premiums in 2024 will require you to help clients understand and manage these higher costs. Additionally, the cap on annual out-of-pocket expenses starting in 2025 presents an opportunity for you to emphasize the long-term benefits of these changes, ensuring clients are aware of potential savings and improved financial stability.
You will need to stay updated on these developments and adjust your strategies accordingly to provide the best possible guidance and support during the Annual Enrollment Period (AEP) and beyond.
5.) IRA Tips for Insurance Agents
Stay Educated on Key Changes
Understand the IRA’s impact on Medicare, such as the increase in Part D premiums in 2024 and the cap on out-of-pocket expenses starting in 2025. Keeping up-to-date will allow you to confidently explain these changes to clients and offer the best solutions for their needs.
Proactively Reach Out to Clients
Don’t wait for clients to come to you with concerns. Initiate conversations during AEP and beyond to inform them of the potential impact of premium increases and savings opportunities, helping them adjust their coverage accordingly.
Emphasize Long-Term Benefits
Highlight the positive aspects of these changes, such as the annual out-of-pocket expense cap. Stress that while premiums may rise in the short term, the IRA reforms will provide long-term financial relief and stability for Medicare beneficiaries.
Provide Personalized Cost-Saving Strategies
Help clients identify ways to offset premium increases by reviewing their Part D plans, checking if they qualify for subsidies, and exploring other coverage options that might offer better value under the new regulations.
Leverage the IRA Changes in Marketing
Position yourself as an expert on Medicare updates by incorporating IRA changes into your marketing efforts. Use educational content, webinars, or newsletters to demonstrate your proactive approach and commitment to helping clients navigate these reforms.
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