New Medicare Out-of-Pocket Drug Cost Cap Will Benefit Millions in 2025

Millions of Medicare Part D beneficiaries will save money after the introduction of a $2,000 out-of-pocket (OOP) spending cap for prescription drugs, a provision that is included in the Inflation Reduction Act of 2022 and takes effect next year, according to a recent KFF analysis.

Based on KFF’s review of drug claims data for Part D enrollees who do not qualify for the low-income subsidy (LIS), the analysis projected that, if the $2,000 cap had been in place in 2021, 1.5 million Medicare Part D beneficiaries — who spent $2,000 or more OOP on prescription drugs — would have saved money. Over the 10-year period between 2012 and 2021, a total of 5 million enrollees had OOP drug costs of $2,000 or more in at least one year.