New cap: Medicare drug plan enrollees could see savings in 2025

An estimated 61,000 Alabamians on Medicare prescription drug plans will see savings thanks to a new out-of-pocket cap that starts Jan. 1, 2025.

The savings are made possible by a provision in the 2022 prescription drug law which caps out-of-pocket prescription drug costs every year, beginning at $2,000 next year, for America’s 56 million Medicare drug plan enrollees.

A recent AARP report analyzed the number of enrollees who will benefit from the cap by state, age, gender and race between 2025 and 2029. The findings indicate that Medicare drug plan enrollees nationwide who reach the new out-of-pocket cap will see average savings of roughly $1,500, or 56%, in 2025 for their prescription drugs.

Other findings from the report include:

• Between 3 and 4 million Part D plan enrollees nationwide are estimated to benefit from the new out-of-pocket cap every year between 2025 and 2029, including more than 61,000 individuals in Alabama.
• By 2029, the share of enrollees benefiting from the new out-of-pocket cap is estimated to be 10% or higher in 19 states, including Alabama, plus the District of Columbia.
• More than three-quarters of Medicare drug plan enrollees who will benefit in 2025 are between the ages of 65 and 84.

“Limiting how much seniors on Medicare drug plans pay for prescription drugs every year builds on other new and important cost-saving measures, such as capping insulin co-pays at $35 a month and making many vaccines, such as shingles and pneumonia, free,” said Candi Williams, state director of AARP Alabama. (AARP)