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essential insights for insurance agents

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).

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.

 

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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

Proactively Reach Out to Clients

Emphasize Long-Term Benefits

Provide Personalized Cost-Saving Strategies

Leverage the IRA Changes in Marketing

*For agent use only. Not affiliated with the U. S. government or federal Medicare program. This website is designed to provide general information on Insurance products, including Annuities. It is not, however, intended to provide specific legal or tax advice and cannot be used to avoid tax penalties or to promote, market, or recommend any tax plan or arrangement. Please note that PSM Brokerage, its affiliated companies, and their representatives and employees do not give legal or tax advice. Encourage your clients to consult their tax advisor or attorney.