What Does the Inflation Reduction Act Mean for You?
What is the inflation reduction act?
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 (not just Tufts Health Plan) to make changes to Medicare drug benefits across multiple years. In addition, there will be changes to how the drug manufacturers price their prescription drugs.
These changes will not impact all members in the same way as it depends on which drugs you currently take. We recommend reviewing your medication list and understanding your costs in 2025. We want to make sure you understand the changes that are coming so there are no surprises when you go to the pharmacy next year.
We know changes to your plan can be stressful and are here to answer any questions you have and provide the information you need to get the most out of your prescription drug coverage.
What are the prescription drug plan changes?
Four changes will be made in 2025 to our plans as a result of the IRA. The prescription drug changes listed below will begin on January 1, 2025.
Lower Maximum out of pocket – This is good news. The 2025 maximum out of pocket amount will be lowered to $2,000. This means $2,000 is the most you would pay for all of your prescription drugs in 2025 before entering the catastrophic phase where Tufts Health Plan pays your prescription drug costs and you pay $0 for prescription drugs.
In 2025, there will be no Coverage Gap Stage (Donut Hole) in your prescription drug coverage. If your prescription drug costs reach $2,000 you move to the Catastrophic Coverage Stage.
- Option to pay in installments – This is also good news for members who use very high-cost medications early in the year where the high out of pocket expense may be difficult to afford all at once. The Medicare Prescription Payment Plan gives you the ability to pay for prescription drugs in installments during the year instead of paying all at once. For example, if you go to the pharmacy in January and your prescription has a $600 copayment you can enroll in the Medicare Prescription Payment Plan to pay nothing to pickup the prescription and instead receive a bill from Tufts Health Plan each month Jan–Dec for a smaller amount to pay for it over time. There is no interest or financing charges for participating in this program. The Medicare Prescription Payment Plan can help by breaking a large prescription drug cost into monthly payments, but it does not lower the total cost of the drug. Learn more about the Medicare Prescription Payment Plan.
- Formulary changes – Our formulary is the list of drugs we cover. Several changes will be made to the formulary in 2025. These changes will cause some drugs to move to a lower tier and have a lower cost share, 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. View the 2025 formulary.
- Cost changes on higher cost drugs – 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 an 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 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 slightly from one fill to the next as opposed to copays where the cost is fixed.
- 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 may 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. Check drug costs by using Optum’s drug pricing tool:
If you have questions, we’re here to help
Our Member Services team is here to help answer any questions you have about the prescription drug changes. Call Member Services at 1-800-701-9000 (HMO) (TTY: 711) or 1-866-623-0172 (PPO) (TTY: 711).