Could Medicare users’ annual drug costs be capped at $2,000?
TL/DR –
In his election-year campaign, President Joe Biden promises to cap the annual out-of-pocket cost for prescription drugs at $2,000 for Medicare Part D users, starting in 2025. The Inflation Reduction Act, which Biden signed in 2022, will implement this cap but only for drugs received through pharmacies, excluding those administered in a doctor’s office. Research shows expensive cancer treatments can cost from $10,000 to $15,000 annually, and a study by the Kaiser Family Foundation (KFF) estimates that the cap would have saved 1.5 million Medicare beneficiaries enrolled in Part D plans money in 2021.
Joe Biden’s Statement on Prescription Drug Costs for Medicare Part D Users
President Joe Biden has made a statement that starting in 2025, “no matter what your total bills are for prescription drugs,” Medicare Part D enrollees will never pay “more than $2,000 a year, because some of these cancer drugs are 10 to 15 thousand bucks a year.” This statement was part of his campaign’s effort to assure Latino voters of his commitment to lowering healthcare costs.
During his interview on April 9 with Enrique Acevedo of Univision News, Biden touched on the fact that Americans can get the same prescriptions for “40 to 60 percent less” than other countries. He also highlighted the decreased cost for insulin, now at “$35 a month” instead of $400.
Medicare Part D and The Inflation Reduction Act
The Inflation Reduction Act, which Biden signed into law in 2022, targets prescription drug costs by placing a cap on annual out-of-pocket expenses for Medicare Part D enrollees. Starting in 2025, these enrollees will not have to pay more than $2,000 per year for their prescription drugs.
According to an analysis by KFF, if this cap had been in place in 2021, 1.5 million Medicare beneficiaries would have saved money. This shows the significant impact of this legislation on reducing out-of-pocket costs for Americans.
Expensive Cancer Drugs and the $2000 Cap
Biden mentioned that some cancer drugs can cost $10,000 to $15,000 a year. Studies from KFF and Vanderbilt University confirm this claim.
However, the $2000 cap does not apply to expensive drugs administered at a doctor’s office, such as chemotherapy. These treatments fall under Medicare Part B, which has its own set of costs and benefits.
PolitiFact’s Ruling
Biden’s statement that “no matter what your total bills are for prescription drugs, you’ll never have to pay … more than $2,000 a year, because some of these cancer drugs are 10 to 15 thousand bucks a year” is rated Mostly True by PolitiFact as the cap only covers drugs received through pharmacies, not those in a doctor’s office.
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