Frequently Asked Questions About the Inflation Reduction Act

How will the Inflation Reduction Act affect your prescription drug coverage in 2025? These Frequently Asked Questions will help provide the information you need to get the most out of your prescription drug coverage.

  • The Inflation Reduction Act (IRA) is a federal law passed by Congress in 2022 to help improve Medicare. 
  • The IRA requires all Medicare Advantage plans to make several changes to Medicare drug benefits across multiple years.  
  • All MAPD and PDP plans are impacted by the IRA – not just Tufts Health Plan.
     

Four changes will be made in 2025:

  1. Maximum out of pocket lowered to $2000 per year
  2. Implementation of the Medicare Prescription Payment Plan 
  3. Formulary tier changes (Moving drugs to higher tiers as well as some drugs no longer covered)
  4. Change from copay to coinsurance on Tiers 3 and 4.

In addition, there will be no Coverage Gap stage (donut hole) where members faced 100% of their drug costs. Once a member meets their maximum out of pocket, they pay $0 for covered prescription drugs.

  • Lower Maximum Out of Pocket 

    The Rx Maximum Out of Pocket amount will be lowered to $2,000. 

    • This is good news.
    • $2,000 is the most you would pay for your prescription drugs in 2025 before entering the catastrophic phase where Tufts Health Plan pays the prescription drug costs and you pay $0 for covered prescription drugs. 

  • The Medicare Prescription Payment Plan   

    The Medicare Prescription Payment Plan is a new payment option to help members manage out-of-pocket Part D drug costs by paying in installments across the calendar year (January-December).

    • This is good news . . .
    • Members opt-in to receive a monthly bill that splits their prescription drugs cost into regular monthly payments (as an alternative to paying the full amount up front).
    • All plans will offer this payment option and member participation is voluntary.
    • Note: Your payments might change every month, so you might not know what your exact bill will be ahead of time. Future payments might increase when you fill a new prescription (or refill an existing prescription) because as new out-of-pocket costs get added to your monthly payment, there are fewer months left in the year to spread out your remaining payments.
  • There is no cost to join the Medicare Prescription Payment Plan  
    • The monthly bill is based on what you have paid for any prescriptions, plus any previous month’s balance, divided by the number of months left in the year. 
    • All plans use the same formula to calculate monthly payments.

Members most likely to benefit from this program are:

  • Those who have high drug costs earlier in the calendar year, or
  • Are likely to reach the $2,000 maximum out-of-pocket earlier in the calendar year
    • Your monthly bill is based on what you would have paid for any prescriptions you get, plus your previous month’s balance, divided by the number of months left in the year. All plans use the same formula to calculate your monthly payments. Review examples of how this payment option works in different situations.
    • Note: Your payments might change every month, so you might not know what your exact bill will be ahead of time. Future payments might increase when you fill a new prescription (or refill an existing prescription) because as new out-of-pocket costs get added to your monthly payment, there are fewer months left in the year to spread out your remaining payments.
       
  • Members whose yearly drug costs are low.
  • Members whose drug costs are the same each month.
  • Individuals enrolled in a 2025 plan can elect the Medicare Prescription Payment Plan program during the Annual Enrollment Period (AEP) (October 15-December 7, 2024) or at any time during the 2025 benefit year. 

There are multiple ways to sign up for the Medicare Prescription Payment Plan: 

  • Enroll online
  • Fax your completed paper enrollment form to: 
    1-617-972-9405
  • Mail your completed paper enrollment form to: 
    Point32Health 
    1 Wellness Way 
    MS D3 
    Canton, MA 02021-9936
  • Call Member Services: 
    HMO Members: 1-800-701-9000 (TTY: 711) PPO Members: 1-866-623-0172 (TTY: 711)
  • Several changes will be made to the formulary in 2025. 
    • These changes will cause some drugs to have higher cost shares and some drugs to no longer be covered. 
    • For drugs that will no longer be covered, the federal government requires that an alternative medication is available.
  • Some higher cost drugs that have a fixed copay will be changing to a coinsurance payment which means you pay a percentage of the actual cost of the drug instead of a fixed copayment. 
    • The percentage you pay depends on the plan you are in and what type of drug it is. 
    • For some members, the coinsurance amount will be a similar or lower cost to the current copay amount. 
    • But the change to a coinsurance payment will mean some members costs at the pharmacy counter will be much higher than the current copay amount. 
    • In addition, since the actual cost of a drug that the pharmacy buys from the manufacturer can change month to month, the cost to the member at the pharmacy counter may change from one fill to the next.
    • Most generic drugs will continue to have low copays that range from $0–$8 per 30-day fill at a preferred retail pharmacy depending on the plan and the drug.
    • If your drugs have high costs next year under the new cost share structure, the $2,000 maximum out of pocket and the Medicare Prescription Payment Plan will help make your drugs more affordable. 
    • The lower maximum out of pocket will protect you from spending more than $2,000 during the year and the Medicare Prescription Payment Plan can be used to spread payments across multiple months during the year.
  • Starting in 2025, the donut hole or coverage gap will be eliminated, meaning there will be no more gap in prescription drug coverage.
  • If your prescription drug costs reach $2,000 you move to the Catastrophic Coverage Stage where Tufts Health Plan pays your prescription drug costs and you pay $0 for prescription drugs.

While the Medicare Prescription Payment Plan helps to manage costs, it doesn’t lower the costs. However, members may be eligible for the following programs: 

  • Extra Help

 A Medicare program that helps pay your Medicare drug costs if you have limited income and resources. Visit secure.ssa.gov/i1020/start to find out if you qualify and apply. You can also apply with your state’s Medicaid office. Visit Medicare.gov/basics/costs/help/drug-costs to learn more.

  • Medicare Savings Program 

A state-run program that helps people with limited income and resources pay some or all of their Medicare premiums, deductibles, and coinsurance. Visit Medicare.gov/medicare-savings-programs to learn more.

  • State Pharmaceutical Assistance Program (SPAP)

A program that may include coverage for your Medicare drug plan premiums and/or cost sharing. SPAP contributions may count toward your Medicare drug coverage out-of-pocket limit. Visit go.medicare.gov/spap to learn more.

  • Manufacturer’s Pharmaceutical Assistance Programs (sometimes called Patient Assistance Programs (PAPs))

A program from drug manufacturers to help lower drug costs for people with Medicare. Visit go.medicare.gov/pap to learn more.

 Many members qualify for savings and don’t realize it. They can visit Medicare.gov/basics/costs/help, or contact their local Social Security office to learn more. To find a local Social Security office visit secure.ssa.gov/IC

  • See our website for additional details on these changes at thpmp.org/IRA
  • Call Member Services. Our Member Services team is here to help answer any questions you have about the prescription drug changes.