Medicare

Aug. 15, 2024 – CMS.gov Newsroom

In August 2022, President Biden signed the Inflation Reduction Act of 2022 (P.L. 117-169) into law. The law makes improvements to Medicare by expanding benefits, lowering drug costs, and improving the sustainability of the Medicare program for generations to come. The law provides meaningful financial relief for millions of people with Medicare by improving access to affordable treatments and strengthening Medicare, both now and in the long run.

For the first time, the law provides Medicare the ability to directly negotiate the prices of certain high expenditure, single source drugs without generic or biosimilar competition. The Centers for Medicare & Medicaid Services (CMS) selected ten drugs covered under Medicare Part D for the first cycle of negotiations for initial price applicability year 2026 and engaged in voluntary negotiations with the drug companies for the selected drugs. Below is the list of negotiated prices, which the statute refers to as Maximum Fair Prices (MFPs), for 10 drugs covered under Medicare Part D that will go into effect beginning January 1, 2026, based on negotiations and agreements reached between CMS and participating drug companies.

CMS negotiated in good faith consistent with the requirements of the law on behalf of people with Medicare and the Medicare program. Throughout the negotiation process, the CMS team considered the factors outlined in the law in negotiating these prices, which supports the need for innovation and drug development with better prices for people with Medicare and the Medicare program.

CMS engaged in genuine, thoughtful negotiations with each participating drug company. CMS developed an initial offer for each drug, consistent with the process described in the statute and the agency’s guidance, and each manufacturer responded with a counteroffer. CMS held three meetings with each participating drug company to discuss the offers and counteroffers, discuss evidence, and attempt to arrive at a mutually acceptable price for the drug. During the negotiation process, CMS revised its offers for each of the drugs upward in response to these discussions. Likewise, many drug companies revised their counteroffers for their drugs downward, based on the discussions with CMS. For five of the selected drugs, this process of exchanging revised offers and counteroffers resulted in CMS and the drug company reaching an agreement on a negotiated price for the drug in association with a negotiation meeting. In four of these cases, CMS accepted a revised counteroffer proposed by the drug company. For the remaining five selected drugs, CMS sent a written final offer to those drug companies, consistent with the process described in its guidance, and in each instance, the drug company accepted CMS’s offer on or before the statutory deadline.

List of the first ten drugs whose 30-day supply price has been negotiated lower with Medicare:

Januvia – $113 down from $527; used by 843,000 enrollees in 2023

NovoLog – $119 down from $495; used by 785,000 enrollees in 2023

Farxiga – $178 down from $556; used by 994,000 enrollees in 2023

Enbrel – $2,355 down from $7,106; used by 48,000 enrollees in 2023

Jardiance – $197 down from $573; used by 1,883,000 enrollees in 2023

Stelara – $4,695 down from $13,836; used by 23,000 enrollees in 2023

Xarelto – $197 down from $517; used by 1,324,000 enrollees in 2023

Eliquis – $231 down from $521; used by 3,928,000 enrollees in 2023

Entresto – $295 down from $628; used by 664,000 enrollees in 2023

Imbruvica – $9,319 down from $14,934; used by 17,000 enrollees in 2023

For those enrolled in a Medicare Advantage plan with Rx drug coverage as well as those enrolled in a stand-alone Part D Rx drug plan, the new negotiated price becomes the new “retail” price for purposes of calculating the co-insurance amount billed to the insured.  For example, assuming Xarelto is a tier 3 drug according to your plan’s drug formulary and the tier 3 co-insurance is 22% of retail, you will pay $43.34 for a 30-day supply ($197 x .22).

Projected Savings for People with Medicare Part D Coverage:

When the negotiated prices go into effect Jan. 1, 2026, collectively people enrolled in Medicare prescription drug coverage using these medications will save an estimated $1.5 billion. These savings are in addition to savings from the $2,000 maximum out-of-pocket limit on all drugs for those with Medicare prescription drug coverage which went into effect Jan. 1, 2024.

Senior.com

February 24, 2025

By Jeff Dailey

Osteoarthritis is a common degenerative joint condition that affects millions of older adults in the United States. Managing osteoarthritis often requires a combination of medical treatments, therapy, and, in some cases, surgical intervention. Medicare covers many osteoarthritis-related treatments, but beneficiaries should be aware of potential deductibles and out-of-pocket costs. This article outlines the latest Medicare guidelines on osteoarthritis treatments and their associated costs.

Medicare-Covered Osteoarthritis Treatments

Doctor Visits and Specialist Care

Medicare Part B covers necessary doctor visits, including consultations with primary care physicians, rheumatologists, and orthopedic specialists. After meeting the annual Part B deductible ($257 in 2025), beneficiaries are responsible for 20% of the Medicare-approved amount for services, while Medicare pays the remaining 80%.

Medications

Prescription medications like nonsteroidal anti-inflammatory drugs (NSAIDs) and corticosteroids can help manage osteoarthritis symptoms. Medicare Part D (Prescription Drug Plan) or Medicare Advantage plans with drug coverage help cover the costs. Each plan has its formulary, so beneficiaries should check if their prescribed medication is covered and the copayments.

Physical and Occupational Therapy

Physical therapy can help improve joint function and mobility. If deemed medically necessary, Medicare Part B covers outpatient therapy services, including physical and occupational therapy sessions. After the Part B deductible is met, patients pay 20% of the Medicare-approved amount for each session.

Durable Medical Equipment (DME)

For individuals who require mobility aids, Medicare Part B covers durable medical equipment, such as walkers, braces, and canes, if prescribed by a doctor. After the deductible is met, coverage follows the 80/20 cost-sharing structure.

Joint Injections and Pain Management

If deemed medically necessary, Medicare covers joint injections such as corticosteroid and hyaluronic acid injections. However, coverage for hyaluronic acid injections varies, and prior authorization may be required. Costs are subject to Part B deductibles and 20% coinsurance.

Surgical Procedures (Joint Replacement Surgery)

If non-surgical treatments fail to relieve, Medicare covers joint replacement surgery, including knee, hip, and shoulder replacements.

• Inpatient Surgery: Medicare Part A covers hospital stays related to joint replacement surgery. The 2025 deductible for inpatient care is $1,676 per benefit period.
• Outpatient Surgery: If performed as an outpatient procedure, Medicare Part B covers the surgery, with 20% coinsurance after meeting the deductible.

Chronic Care Management (CCM)

Medicare offers chronic care management services under Part B for individuals with multiple chronic conditions, including osteoarthritis. These services involve personalized care plans, provider coordination, and ongoing monitoring. A monthly copayment may apply.

What Medicare Does Not Cover

• Acupuncture: Medicare only covers acupuncture for chronic lower back pain, not for osteoarthritis.
• Stem Cell Therapy: Experimental treatments, including stem cell therapy, are not covered.
• Over-the-counter Medications and Supplements: Medicare does not cover supplements such as glucosamine and chondroitin.

Final Considerations

While Medicare provides substantial coverage for osteoarthritis treatments, beneficiaries should always verify coverage details with their specific plan provider. Out-of-pocket costs can vary based on plan selection, copayments, and deductibles. For additional assistance, it is recommended that beneficiaries contact Medicare (1-800-MEDICARE) or review the latest Medicare guidelines online.

Annika Kim Constantino

Jan. 16,2025

Key Points

• Most Medicare patients who hit the new $2,000 cap on out-of-pocket spending for prescription drugs could see significant savings, according to a report from AARP. 
• The findings suggest the spending maximum could be hugely beneficial for older adults in Medicare who struggle to afford high-cost drugs for cancer, rheumatoid arthritis and other serious conditions.
• It is one of the most consequential provisions in President Joe Biden’s 2022 Inflation Reduction Act, designed to cut high drug costs.

Most Medicare patients who hit the new $2,000 cap on out-of-pocket spending for prescription drugs could see big savings, despite changes in premiums, according to a report today by AARP. 

The findings suggest the cap could be a huge benefit to older adults in Medicare who struggle to afford high-cost drugs for cancer, rheumatoid arthritis and other serious conditions. Those seniors and other U.S. patients pay two to three times more for prescription drugs than people in other developed nations.

The limit went into effect Jan. 1, 2025. It’s one of the most consequential provisions in the 2022 Inflation Reduction Act, designed to cut high drug costs – along with a $35 monthly cap on insulin and Medicare price negotiations with big pharma.

The report found that 94% of the more than 1 million enrollees in Medicare Part D expected to reach the new cap in 2025 will have lower out-of-pocket costs – including premiums and cost-sharing – and save an average of $2,474. That’s a 48% decrease on average in their total out-of-pocket costs, according to the report, which analyzed plan enrollment and premium data, among other information. 

That 1 million tally excludes Medicare beneficiaries who receive a low-income subsidy and those in employer waiver plans.

An estimated 62% of those 1 million enrollees will save an average of more than $1,000 in 2025, while 12% will save more than $5,000, the report said. The remaining 6% of Part D enrollees who are projected to reach the new cap are expected to have higher out-of-pocket costs, with an average of $268 in additional spending in 2025, the report said. 

Notably, the share of Part D enrollees expected to reach the cap and have lower total out-of-pocket costs in 2025 is estimated to be 95% or higher in 33 states and Washington, D.C.

“When you’re able to provide these types of savings, that frees up those funds for other really important things that maybe [patients] were having to make trade-offs for, paying for their food or paying for their rent,” Leigh Purvis, prescription drug policy principal at AARP, said in an interview. “It’s a really meaningful impact, especially for a population that’s on a fixed income.” She added that the median income of Medicare beneficiaries is around $36,000 a year. 

Those savings come despite changes to Part D premiums in 2025, AARP said. Purvis said the new prices for the first 10 medications selected for Medicare negotiations – and the lower costs expected from them – do not go into effect until 2026, so premiums have increased in some cases.

She said critics have been trying to blame the law for those premium increases and higher costs for Medicare enrollees overall. But the report said the lower out-of-pocket costs for most patients who reach the $2,000 cap will more than offset higher premiums.

The positive effect “will only grow larger” as new negotiated prices for the first round of drugs go into effect in 2026, according to the report. 

“The Medicare program is going to be saving a lot of money, so this is really a story that is much bigger than it appears, just because these savings go to a lot of different people in a lot of different ways,” Purvis said. 

A separate report from AARP found that 3.2 million Medicare recipients are expected to see savings from the out-of-pocket cap in 2025. By 2029, the number is expected to increase to 4.1 million enrollees.

Medicare covers about 66 million people in the U.S., and 50.5 million patients are enrolled in Part D plans, according to 2023 data from health policy research organization KFF.

The new price cap applies to all prescription drugs under Medicare Part D but doesn’t include drugs given to patients in the hospital or other health-care settings such as anesthesia and chemotherapy. 

Before the change, people on Medicare typically had to spend $7,000 or more out of pocket on prescription medications before they qualified for so-called “catastrophic coverage,” when insurance kicks in and covers most of the drug’s cost. Under this coverage, patients are charged a small co-payment or a percentage of a drug’s cost, usually 5%.

PLANSPONSOR – July 30, 2024

Remy Samuels

A 65-year-old couple will need $395,000 in combined savings to afford the cost of certain Medicare plans in retirement, according to the Milliman Retiree Health Cost Index. 

The average healthy 65-year-old retiring in 2024 is projected to spend a significant amount on health care over the course of their remaining lifetime, according to the 2024 Milliman Retiree Health Cost Index. 

The two most common health care coverage options chosen by Medicare-eligible retirees are Medicare Advantage and Original Medicare with Medigap plus Part D. A healthy 65-year-old man retiring in 2024 with a MAPD (Medicare Advantage with Rx Drug) plan is projected to spend $128,000 on health care in his remaining lifetime, and a woman with the same coverage is projected to spend $147,000 in her remaining lifetime, according to Milliman. 

Health Care Costs on the Rise 

To afford these costs, Milliman projected that a man with a MAPD plan needs to have at least $86,000 in savings and a woman with the same coverage needs at least $96,000 in savings. The Milliman Index projected that this is the amount of savings (net of taxes) needed at age 65 to pay a retiree’s remaining lifetime health care “total spend,” assuming an investment return of 3% per year.  

For a 65-year-old man retiring in 2024 with Medicare plus Medigap plus Part D, the costs are even higher, as they are projected to spend approximately $281,000 on health care expenses throughout retirement and a woman with the same coverage is projected to spend $320,000. 

The difference in cost is largely because women on average live longer than men, according to Milliman. The retired man was projected to live until 88, and the woman until 90, in Milliman’s calculation.  

The cost of health care in retirement will also depend on several other factors, Milliman explained, such as when someone retires, where they live during retirement and what Medicare benefit plan they choose. The cost of Medicare Advantage, Medigap and Part D plans can vary greatly by state. For example, in Florida, a 65-year-old retiring in 2024 with a lifespan of 88 can be expected to spend upwards of $340,000 on health care, as opposed to around $260,000 to $280,000 in Texas. 

Retirees have less control over factors such as health status or how long they will live – both of which are primary drivers of how much their health care will cost.  

Milliman also measured the savings needed for a healthy 65-year-old couple in 2024 compared with 2023. A hypothetical couple retiring in 2024 will need to save approximately $7,000 more than they would have in 2023 if they have Original Medicare plus Medigap and Part D coverage, and $8,000 less if they have a MAPD plan, all else being equal.  

How Health Care Costs Have Changed 

As a result of the Inflation Reduction Act, there were significant changes to Medicare Part D Rx Drug coverage in 2024. Out-of-pocket expenses were significantly reduced because of the law’s elimination of cost sharing in the catastrophic phase of insurance coverage, but as a result, this increased the plan liability, driving an increase in premiums.  

In addition, there has been continued growth in spending on major brand name drugs like GLP-1s – which includes medications like Ozempic and Wegovy – even when only covered for diabetes and not obesity, as well as SGLT2s, that slow heart failure, and certain autoimmune drugs. These costs also contributed to increasing premium and out-of-pocket costs, and the trend is expected to continue over the next couple of years, according to Milliman. Higher prescription drug costs have also increased short-term health care cost expectations over the next couple years.  

Impact of Retiring Earlier vs. Later 

Most people cannot apply for Medicare until age 65, so retiring early means health care costs can be much higher for the individual. For example, if someone retires five years before they are eligible, at age 60, they can expect to pay 56% more for health care expenses if enrolled in Original Medicare plus Medigap (Plan G) plus Part D, and 86% more for health care expenses if they enroll in a MAPD plan than they would if they waited until age 65 to enroll. 

Conversely, delaying retirement allows retirees to boost savings and continue earning income and employer-sponsored benefits like health care. Retiring at age 70, for example, would allow a retiree to pay 29% less on health care expenses than if they retired at 65 and are enrolled in Original Medicare plus Medigap plus Part D. They would pay 30% less for health care with a MAPD plan. 

“Healthcare expenses are an important and sometimes overlooked component of retirement planning,” said Robert Schmidt, a Milliman principal and co-author of the Retiree Health Cost Index, in a statement. “By taking a realistic look at their health status and healthcare expenses, and then budgeting accordingly, people can take steps to enjoy a less stressful, financially healthier retirement.”

Greg Says is aware that most Medicare beneficiaries find plan option terminology a bit confusing.  Please don’t hesitate to reach out to us at InsuranceForOver65 for help in understanding your Medicare plan options especially as we head into the Annual Election Period (Oct. 15 – Dec. 7) during which you can change plans for 2025.

BY TARA SUTER – 06/05/24

More older Americans are concerned about the future of Medicare, according to a survey published Wednesday.

Seventy-four percent of Americans aged 50-64 say they are “extremely worried or worried” about Medicare not being “available when you become eligible to receive it,” according to the West Health-Gallup 2024 Survey on Aging in America.

That figure is up 13 points from 2022. when 61 percent of the same age group said they were concerned about Medicare availability when they are eligible for it.

Seventy-three percent of Americans across all age groups surveyed said they are “extremely worried or worried” about Medicare’s availability when they are eligible for it, up 6 points from 2022. 

“Threats to Medicare and Social Security loom large, and people are worried policymakers won’t do enough to protect and strengthen them,” Timothy Lash, the president of West Health, said in a press release accompanying the report.

“These safety net programs are part of the fabric of aging that millions of older Americans rely upon, so any potential disruption or question mark around them is cause for alarm and deserving of greater attention and action from policymakers,” Lash continued.

The financial outlook for Medicare’s funding has improved in the last year, with its funding to pay all costs of hospital services of older and disabled beneficiaries not forecast to run out until 2036, compared to the previous year’s estimate that it would run out in 2029.

“The fact that such a large percentage of U.S. adults observe little prioritization of issues affecting older Americans underscores the extent to which such prioritization could influence voting preferences, particularly among those already eligible for the federal safety net programs and those that will be soon,” Dan Witters, research director of the Gallup National Health and Well-Being Index, said in the release.

The West Health-Gallup survey was conducted between Nov. 13, 2023, and Jan. 8, featuring 5,184 adults. The margin of sampling error is plus or minus 1.7 percentage points at the 95 percent confidence level when response percentages are about 50 percent. When response rates are about 10 percent or 90 percent, the margin of sampling error is plus or minus 1 percentage point. Age subgroups have higher margins of error, commonly ranging from 3 percentage points to 5 percentage points.

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Greg Says suggests that all voting age citizens put pressure on Congress to pass legislation to extend the life of Social Security and Medicare rather than continuing to “kick the can” down the road.  This will likely mean increasing the eligibility age, increasing payroll deductions, and reducing benefits all of which will require some sacrifice for beneficiaries and some courage for our elected representatives.