Over 3 million Americans are expected to save money on prescription drugs next year when a new $2,000 cap on out-of-pocket costs for Americans with a Medicare drug plan goes into effect in January.
By the end of the decade that number of people benefiting from the cap will expand to over 4 million, according to a new report from AARP, the leading advocacy group for American seniors.
Around 56 million Americans are enrolled in Medicare prescription drug plans, but without a cap on out-of-pocket costs, many seniors still struggle to afford vital medications.
A study published in the scientific journal JAMA Network Open found that 1 in 5 American seniors have skipped doses or failed to fill a prescription due to costs.
“No person should have to face unaffordable prescription drug costs year after year,” says Leigh Purvis, AARP’s prescription drug policy principal, said in a press release. “This new law will bring relief to so many people who have been struggling with the effects of skyrocketing drug prices.”
AARP’s report estimates that about 1.4 million Americans will save an average of $1,000 or more in 2025 thanks to the price cap. More 420,000 Medicare beneficiaries them will save over $3,000.
The $2,000 cap was introduced in the Inflation Reduction Act (IRA), which AARP advocated for and President Joe Biden signed into law in 2022. The bill also set a $35 monthly cap on out-of-pocket insulin costs for Medicare enrollees. Additionally, it gave Medicare the power to negotiate lower prices with drug makers for medications that made up the most of the program’s drug spending.
Vice President and presidential candidate Kamala Harris said this month that if elected shed would expand the caps established by the IRA to all Americans.