Major reductions in prescription drug prices for some with Medicare could raise premiums

ALABAMA (WHNT) — Significant changes in prescription drug prices for people with Medicare in Alabama will soon become a reality saving them hundreds of dollars, but the difference could be made up elsewhere prompting a potential spike in their monthly premiums.

The changes coming to insurance plans are part of the Inflation Reduction Act of 2022 aimed at reducing the price of prescription drugs for people with Medicare. Currently, the out-of-pocket maximum for medications is $8,000 dollars, but come 2025, that price will go down to $2,000.

“It’s a big drop but it’s going to affect everything across the board as far as premiums that’s mostly likely going to go up,” Life Line Insurance’s Rick Israel said.

Israel has years of experience in the insurance industry and says the changes are twofold.

“It’s going to be a good thing for some individuals that are on some very expensive drugs,” Israel said. “It could affect individuals who take very little drugs, it could end up raising their premium to compensate for what the insurance companies are going to have to pay out when the individuals hit that $2,000 mark.”

Differences also include people paying for their medications through a monthly fee until meeting their maximum meaning they won’t have to worry about a large one-time payment at the pharmacy.

Once that $2,000 mark is met, Israel says their medications will be fully covered. As a principle broker, Israel knows the importance of getting ahead early.

He’s recommending people with Medicare start looking at their plans and getting with their provider ahead of open enrollment in October.

“Make sure that their medication list is current and up to date, make sure that if there’s any drug changes in your daily use you let your agent know so they could get that into the system,” Israel explained. “This is going to be the most significant change since Medicare Advantage plans came out.”

If you don’t have an agent, Israel offers free services to help people figure out the coverage plans that fit them best. You can call 256-746-9581 or visit Life Line Insurance’s website to schedule a visit here.

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