The Office of the Assistant Secretary for Planning and Analysis (ASPE) released a new brief that highlights the potential impacts of the newly implemented Medicare prescription drug (Part D) policies authorized in the Inflation Reduction Act (IRA). Signed into law in 2022, the IRA aims to strengthen the Medicare program by providing meaningful financial relief for beneficiaries and improving access to affordable treatments. Benefits of the IRA policies for Medicare include opportunities for CMS to negotiate Medicare drug prices, a requirement that drug companies pay inflation rebates, changes in Part B drugs, and a redesigned prescription drug program that expands eligibility for full Part D low-income subsidy (LIS) benefits to individuals between 130 and 150 percent of the federal poverty level (FPL), also known as partial LIS subsidy. About 23 percent of partial LIS enrollees live in rural areas, which is higher than the share of Part D (non-LIS) enrollees who live in rural areas (15 percent). ASPE estimates all LIS enrollees could experience a reduction of $300 in average annual out of pocket costs for Part D covered medications. With rural, non-LIS Part D enrollees are estimated to see more than $1,000 savings in out-of-pocket Part D costs in 2024 and $2,450 in 2025.
