ARI SHAPIRO, HOST:
Prescription drug expenses are going way down for about 3 million American seniors this year. That's because the Biden administration capped out-of-pocket prescription costs - not for everybody, just those on Medicare with some of the highest costs. It's part of the Inflation Reduction Act. Reporter Alex Olgin met a retired nurse who expects the cap will save her $7,000 on a single drug this year.
ALEX OLGIN, BYLINE: This year, 70-year-old Judy Aiken is sure she'll be able to afford the medicine she needs to treat her psoriatic arthritis.
JUDY AIKEN: You know, we can take a deep breath.
OLGIN: That's because Aiken knows how much it'll cost - $2,000. Two thousand dollars is now the limit for how much Aiken and 53 million other seniors will pay for the meds that they get from pharmacies. For Aiken, that means no more delaying home repairs or skipping doses of the common but pricey arthritis drug Enbrel.
AIKEN: I'm not proud to say this, but there were times when I would delay taking my Enbrel. It may have come at a time when we had several financial obligations, which is against, you know, everything I stand for as a nurse (laughter).
OLGIN: A study published in the journal JAMA found that in 2022, a fifth of patients on Medicare said they skipped or delayed meds because of cost.
JULIETTE CUBANSKI: I think the unfortunate truth is that we're all just a scary diagnosis away from needing an expensive drug.
OLGIN: Juliette Cubanski is an expert on Medicare drug pricing at KFF, a nonpartisan health policy research organization.
CUBANSKI: The cap offers peace of mind, you know, that you'll be more able to afford your medications, and you're going to be less likely to have to leave the pharmacy empty-handed.
OLGIN: Cubanski explains this overhaul fixes a gaping hole in the 20-year-old Medicare prescription drug benefit. When Congress created the coverage, lawmakers wanted to offer seniors drug plans while keeping taxpayer spending down. That meant leaving seniors who needed expensive drugs on the hook for thousands of dollars.
CUBANSKI: You know, the number of expensive medications has increased since then, and so this is - you know, this cap is coming into place at a time when we have prescription medications that can cost tens or hundreds of thousands of dollars a year.
OLGIN: So in 2022, lawmakers came up with a plan to fix this problem. They redesigned Medicare's drug plans and the Inflation Reduction Act. The new design basically means that insurers which offer these Medicare drug plans are on the hook for more costs. But when insurers face higher costs, they pass those on to Medicare patients by charging higher monthly premiums. That's what happened this year. So the Biden administration kicked in some money to cushion the blow to consumers, at least for the next three years.
BRIAN BLASE: It's bad policy, and, yeah, I mean, it should be changed.
OLGIN: Brian Blase worked on health policy for the first Trump administration and is now president of the conservative healthcare think tank the Paragon Institute. He says, look, only a fraction of seniors - about 10% - spend more than $2,000 on drugs in any one year. So while patients like Judy Aiken are seeing big benefits, it's at the expense of other seniors and taxpayers. He wants the second Trump administration to up the spending cap. Fewer seniors on expensive drugs would save money, but in theory, monthly premiums would be lower for most seniors. That might not be simple.
BLASE: You could see that that is going to be politically challenging, to raise the out-of-pocket limit.
OLGIN: So it's unclear what the Trump administration will do. For now, though, Judy Aiken is thrilled that she'll be able to afford her medicine and home repairs. For NPR News, I'm Alex Olgin.
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