New Medicare reforms can help seniors -- but only if they opt in


New Medicare reforms can help seniors -- but only if they opt in

By Marvell Adams Jr.

October 15th marked the start of Medicare's annual open enrollment period. Seniors can choose to stay on their current plan or switch to a new one. But this year, that choice is far more important -- and complex -- than usual.

Medicare's prescription drug benefit, also known as "Part D," has undergone major changes that could save seniors hundreds or even thousands of dollars on prescriptions.

However, an important change that allows seniors to "smooth" their cost-sharing over the course of the year requires Medicare beneficiaries to opt in. Additionally, right now, a large share of seniors -- and their caregivers -- simply aren't aware of the new policies.

As part of the Inflation Reduction Act of 2022, Congress established a new $2,000 annual out-of-pocket cap on prescription drug spending. Beginning in January, Part D enrollees will no longer have to spend more than $2,000 of their own money on covered medications in a single year.

This one policy could prove life-changing for millions of Medicare beneficiaries. According to one recent analysis by the Department of Health and Human Services, some 3.5 million Medicare beneficiaries struggled to afford their medicines in 2019.

For many of these enrollees, life is about to get a lot easier. In fact, a separate HHS report estimated that 18.7 million Medicare beneficiaries will see some sort of out-of-pocket savings from the IRA Part D re-design.

In addition to the $2,000 annual cap, the IRA also included a "smoothing" provision called the Medicare Prescription Payment Plan, allowing beneficiaries to spread their out-of-pocket drug costs evenly over the course of the year. This can help make monthly medication costs more predictable for seniors on tight budgets and fixed incomes.

To understand the immense impact of the $2,000 cap and the smoothing provision, consider a recent case study from researchers at the University of Pennsylvania.

The study imagines a 73-year-old patient named John Doe who is suffering from chronic myeloid leukemia, a slow-progressing but devastating form of bone cancer. John takes a cancer medication which costs nearly $167,000 a year.

Normally, John would end up paying more than $10,000 out-of-pocket for this one medication. But not anymore. With the new out-of-pocket limit and smoothing option, he would pay just $167 a month, or $2,000 over the course of the year.

But unlike the $2,000 annual spending limit, the smoothing provision is optional. Beneficiaries will need to know about this new policy to opt in, but few seniors are aware of it.

A recent poll found that around three-quarters of adults don't know about the new $2,000 out-of-pocket cap. It's reasonable to assume a comparable -- if not larger -- number of people are in-the-dark about smoothing.

The Centers for Medicare & Medicaid Services needs to be doing more to inform patients about the benefits of smoothing. This is also an area where the caregiver community has a significant role to play.

As a caregiver myself, I understand the invaluable role that we play in helping patients make informed decisions about their health. Caregivers can make an enormous difference in the lives of Medicare beneficiaries by understanding the new reforms and making sure their loved ones opt in to smoothing when right for them.

National Family Caregivers Month in November is an important reminder of the critical role America's caregivers play in supporting the health of their loved ones. We can't forget to provide caregivers with the information they need to guide their loved ones in the healthcare system.

Marvell Adams Jr. is the CEO of Caregiver Action Network. This piece was originally published by PennLive.

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