Premiums for Medicare Part D, which covers prescription drugs, will be rising by as much as $35 per month for many Long Islanders next year, but experts say changes in the program will reduce medication costs overall.

A $2,000 cap on out-of-pocket spending will go into effect Jan. 1, one of several Medicare initiatives to lower drug costs for consumers, which, doctors say, will reduce the number of people who endanger their health by forgoing medications for financial reasons. 

Although the law's prescription drug provisions are designed to reduce the impact of rising medicine prices on Medicare enrollees and on Medicare's budget, its benefits are uneven. A Long Islander with cancer could save thousands of dollars a year in drug costs, while a fellow Medicare enrollee who takes less expensive medications may pay hundreds more in premiums each year, as some insurance companies raise rates to make up for paying a higher share of drug costs.

Michael Gillman, 77, of Seaford, said he "flipped out" when he read that the premiums for his and his wife Amy Gillman’s Wellcare Value Script plans will shoot up more than 900% — from $3.70 to $38.70 a month.

"I am not alone in this," he said.

Mindy Gorman-Plutzer, 69, of Great Neck, takes medications that together would cost her more than $6,200 a year out of pocket, including one for cystic fibrosis, Pertzye, that is $450 a month.

"I’m thrilled by the $2,000 cap that’s coming into play," she said.

The $2,000 cap and other changes to Part D that stem from the 2022 Inflation Reduction Act will decrease costs for the Medicare system, in addition to saving money for millions of Medicare recipients, said Leigh Purvis, prescription drug policy principal for the Washington, D.C.-based AARP.

"Overall, Medicare Part D is becoming much more generous than it was before," she said.

And despite the increased benefits, and increased premiums for the Gillmans and others, many Americans will continue to pay nothing in premiums.

Some changes in the 19-year-old Part D program already are in effect; others are being phased in over years.

"We’re talking about billions of dollars in savings for beneficiaries and for the program," Purvis said.

Nationwide, about 54 million Americans, or more than 80% of Medicare enrollees, have Part D coverage, according to the Centers for Medicare and Medicaid Services. That includes nearly a half million people on Long Island.

Most stand-alone Part D policies in New York for people with traditional Medicare are going up by the maximum $35 a month, an analysis for Newsday by the San Francisco-based health policy nonprofit KFF found.

About a third of Long Islanders with Part D coverage have it through Medicare Advantage, which are plans with more restrictions than traditional Medicare that usually include prescription drug coverage within overall premiums. Those overall premiums are projected to on average decrease about 7% nationwide, with most remaining at $0, a September CMS analysis found.

Medicare Advantage plans, like the stand-alone Part D plans, are offered by private insurance companies but subsidized and regulated by the federal government. Insurers aren't required to cover all medications, and uncovered drugs don't apply to the $2,000 cap. Medicare primarily covers people 65 and older, as well as those with disabilities and certain serious health conditions.

Although the revisions will help millions, some people in the short term will pay more overall, especially those who currently do not have high prescription-drug costs, said Juliette Cubanski, deputy director of Medicare policy for KFF.

Twelve of the 15 stand-alone Part D plans currently offered in New York will have increases, and the three with decreases will combine with other plans, the KFF analysis found.

Most will rise by the maximum that Medicare is allowing for 2025 for almost all plans, $35, a limit that was instituted to prevent sharper increases in rates as insurers try to recoup some of the expense of covering a bigger chunk of drug costs.

The plan that the Gillmans have, Value Script, saw by far the largest percentage increase in New York. It is still the cheapest plan.

Gillman said he and his wife last year together spent about $600 out-of-pocket on prescription drugs. So, Gillman said, they will pay higher premiums without benefiting from the new $2,000 cap.

Yet premiums vary greatly nationwide, based on factors such as how healthy a state’s residents are and differences in medical costs, Cubanski said.

Premiums for Value Script, the nation's most popular Part D plan, will be $0 in 43 states next year, according to St. Louis-based Centene, which owns Wellcare.

The average premium nationwide for stand-alone Part D plans will drop from $41.63 in 2024 to $40 in 2025, according to the CMS analysis.

That doesn’t include the more than 14 million people on Medicare with low incomes and resources who pay significantly lower costs. Medicare's low-income program expanded this year.

Cubanski said even though many enrollees will pay more next year, the $2,000 cap offers long-term financial protection for anyone who signs up for Medicare prescription drug coverage. 

"We’re all a scary diagnosis away from needing expensive medication," she said, and the cap means beneficiaries "won't have to bankrupt themselves or go into a lot of medical debt in order to afford the medications that they might need."

When Gorman-Plutzer signed up for Medicare at age 65, "I had very few medications, because everything was consistently OK," she said.

In late 2023, she was diagnosed with cystic fibrosis.

"This was a shock for me to have this diagnosis so late in my life," she said.

In New York, an estimated 261,000 Medicare enrollees are expected to reach the cap in 2025, and 347,000 by 2029, according to an analysis by the AARP's Purvis. The cap’s annual increase will be tied to the inflation rate.

In a July 2023 KFF nationwide poll, nearly a third of adult respondents said they skipped doses, cut pills in half or did not fill a prescription in the previous year, or did a combination of the three, because of cost.

The $2,000 cap will lead people to more consistently take the full dose of their medications, said Gorman-Plutzer’s physician, Dr. Nicole Lapinel, associate director of Northwell Health’s Adult Cystic Fibrosis Center in New Hyde Park.

For patients with cystic fibrosis, the advent of new medications over the past several years has meant significantly less time in hospitals, a better quality of life and improved lung function — if they take the drugs consistently, said Lapinel, a pulmonology and critical care physician.

But some patients take cheaper, less-effective drugs and endure worse symptoms to save money, she said.

Before the Inflation Reduction Act, there was no cap on out-of-pocket prescription payments. This year, Medicare imposed its first out-of-pocket cap — $3,300 to $3,800 for most plans. But patients must pay until they reach the cap. That led to some patients rationing medications at the beginning of the year, to spread out costs, Lapinel said.

A monthly payment plan for out-of-pocket prescription expenses, which goes into effect Jan. 1, will help prevent that, she said.

The $2,000 cap is only for Part D medications. Gorman-Plutzer puts a drug called Pulmozyme in her nebulizer to break up mucus in her throat — but because it is used with a medical device, it’s covered under Part B of Medicare, so it’s not applied toward the Part D cap. She is supposed to use Pulmozyme every day, but she skips it about half the time, because of the $800 monthly cost.

The issues Gorman-Plutzer has with Pulmozyme reflect Medicare’s complex and sometimes confusing rules.

Jen Rindos, 55, of Hicksville, was put on Medicare in 2022, after the pain from her stage 4 breast cancer caused her to leave her job as a prekindergarten teacher and sign up for Social Security disability.

Her husband’s private insurance initially covered the cancer drug Orserdu, which with the high dosage she needed had a list price of about $30,000 a month, but the insurance company stopped covering after two months.

"It was very frustrating because my doctor said it was working," Rindos said. "It was shrinking my tumors."

Her doctor put her on Enhertu, an infusion covered by Medicare Part B that also is shrinking her tumors — but often leaves her with nausea, vomiting, headaches, fatigue and hair loss.

She is signing up for Part D so she can get back on Orserdu, if her doctor approves. Without the $2,000 cap, "It would be devastating for my family," Rindos said.

Medicare-approved plans must cover all cancer drugs, but for most categories of drugs that are targeted to treat a certain disease or condition, plans must only cover at least two medications — and can choose to favor cheaper, less-effective drugs, said Gretchen Jacobson, vice president of Medicare at the Manhattan-based Commonwealth Fund, which supports health care research.

That’s one reason Medicare beneficiaries should shop around each open enrollment period — which this year ends Dec. 7 — before choosing a Part D plan.

"People can't assume just because their drug was covered in this past year that it'll be covered by their plan next year," she said.

The $2,000 cap is one of many changes in the Inflation Reduction Act that will reduce drug costs for some Medicare beneficiaries, especially those taking expensive medications, and for the Medicare system.

Some of the changes from the 2022 legislation, such as giving Medicare the authority to negotiate drug prices, won't take full effect for several years. The first 10 drugs subject to negotiation have maximum prices 38% to 79% lower than the list prices, starting in 2026. Negotiations for 90 more drugs will take place over the next five years. 

The law also limits the monthly price of insulin to $35, requires drug companies that raise prices higher than the inflation rate to pay a rebate for the excess amount to Medicare and requires insurance companies — rather than Medicare — to pay a much higher percentage of drug costs after a policyholder reaches the $2,000 cap.

Premiums for Medicare Part D, which covers prescription drugs, will be rising by as much as $35 per month for many Long Islanders next year, but experts say changes in the program will reduce medication costs overall.

A $2,000 cap on out-of-pocket spending will go into effect Jan. 1, one of several Medicare initiatives to lower drug costs for consumers, which, doctors say, will reduce the number of people who endanger their health by forgoing medications for financial reasons. 

Although the law's prescription drug provisions are designed to reduce the impact of rising medicine prices on Medicare enrollees and on Medicare's budget, its benefits are uneven. A Long Islander with cancer could save thousands of dollars a year in drug costs, while a fellow Medicare enrollee who takes less expensive medications may pay hundreds more in premiums each year, as some insurance companies raise rates to make up for paying a higher share of drug costs.

Michael Gillman, 77, of Seaford, said he "flipped out" when he read that the premiums for his and his wife Amy Gillman’s Wellcare Value Script plans will shoot up more than 900% — from $3.70 to $38.70 a month.

WHAT NEWSDAY FOUND

  • Premiums for Medicare Part D will increase for many Long Islanders next year, but that is amid changes in the prescription drug program that will reduce medication costs overall, experts say.

  • A $2,000 cap on out-of-pocket expenses will take effect, as part of the 2022 Inflation Reduction Act. In New York, about 261,000 Medicare enrollees are expected to reach that cap.

  • Other Part D changes contained in the act include Medicare negotiating prices of dozens of drugs and penalties for drug companies that raise prices higher than the inflation rate.

"I am not alone in this," he said.

The premiums for Michael and Amy Gillman will rise from...

The premiums for Michael and Amy Gillman will rise from $3.70 a month to $38.70. Credit: Rick Kopstein

Mindy Gorman-Plutzer, 69, of Great Neck, takes medications that together would cost her more than $6,200 a year out of pocket, including one for cystic fibrosis, Pertzye, that is $450 a month.

"I’m thrilled by the $2,000 cap that’s coming into play," she said.

The $2,000 cap and other changes to Part D that stem from the 2022 Inflation Reduction Act will decrease costs for the Medicare system, in addition to saving money for millions of Medicare recipients, said Leigh Purvis, prescription drug policy principal for the Washington, D.C.-based AARP.

"Overall, Medicare Part D is becoming much more generous than it was before," she said.

And despite the increased benefits, and increased premiums for the Gillmans and others, many Americans will continue to pay nothing in premiums.

Some changes in the 19-year-old Part D program already are in effect; others are being phased in over years.

"We’re talking about billions of dollars in savings for beneficiaries and for the program," Purvis said.

Almost 500,000 Long Islanders

Nationwide, about 54 million Americans, or more than 80% of Medicare enrollees, have Part D coverage, according to the Centers for Medicare and Medicaid Services. That includes nearly a half million people on Long Island.

Most stand-alone Part D policies in New York for people with traditional Medicare are going up by the maximum $35 a month, an analysis for Newsday by the San Francisco-based health policy nonprofit KFF found.

About a third of Long Islanders with Part D coverage have it through Medicare Advantage, which are plans with more restrictions than traditional Medicare that usually include prescription drug coverage within overall premiums. Those overall premiums are projected to on average decrease about 7% nationwide, with most remaining at $0, a September CMS analysis found.

Medicare Advantage plans, like the stand-alone Part D plans, are offered by private insurance companies but subsidized and regulated by the federal government. Insurers aren't required to cover all medications, and uncovered drugs don't apply to the $2,000 cap. Medicare primarily covers people 65 and older, as well as those with disabilities and certain serious health conditions.

Although the revisions will help millions, some people in the short term will pay more overall, especially those who currently do not have high prescription-drug costs, said Juliette Cubanski, deputy director of Medicare policy for KFF.

Twelve of the 15 stand-alone Part D plans currently offered in New York will have increases, and the three with decreases will combine with other plans, the KFF analysis found.

Most will rise by the maximum that Medicare is allowing for 2025 for almost all plans, $35, a limit that was instituted to prevent sharper increases in rates as insurers try to recoup some of the expense of covering a bigger chunk of drug costs.

The plan that the Gillmans have, Value Script, saw by far the largest percentage increase in New York. It is still the cheapest plan.

Gillman said he and his wife last year together spent about $600 out-of-pocket on prescription drugs. So, Gillman said, they will pay higher premiums without benefiting from the new $2,000 cap.

Yet premiums vary greatly nationwide, based on factors such as how healthy a state’s residents are and differences in medical costs, Cubanski said.

Premiums for Value Script, the nation's most popular Part D plan, will be $0 in 43 states next year, according to St. Louis-based Centene, which owns Wellcare.

The average premium nationwide for stand-alone Part D plans will drop from $41.63 in 2024 to $40 in 2025, according to the CMS analysis.

That doesn’t include the more than 14 million people on Medicare with low incomes and resources who pay significantly lower costs. Medicare's low-income program expanded this year.

'A scary diagnosis away' 

Cubanski said even though many enrollees will pay more next year, the $2,000 cap offers long-term financial protection for anyone who signs up for Medicare prescription drug coverage. 

"We’re all a scary diagnosis away from needing expensive medication," she said, and the cap means beneficiaries "won't have to bankrupt themselves or go into a lot of medical debt in order to afford the medications that they might need."

When Gorman-Plutzer signed up for Medicare at age 65, "I had very few medications, because everything was consistently OK," she said.

In late 2023, she was diagnosed with cystic fibrosis.

"This was a shock for me to have this diagnosis so late in my life," she said.

In New York, an estimated 261,000 Medicare enrollees are expected to reach the cap in 2025, and 347,000 by 2029, according to an analysis by the AARP's Purvis. The cap’s annual increase will be tied to the inflation rate.

In a July 2023 KFF nationwide poll, nearly a third of adult respondents said they skipped doses, cut pills in half or did not fill a prescription in the previous year, or did a combination of the three, because of cost.

The $2,000 cap will lead people to more consistently take the full dose of their medications, said Gorman-Plutzer’s physician, Dr. Nicole Lapinel, associate director of Northwell Health’s Adult Cystic Fibrosis Center in New Hyde Park.

Some patients take cheaper, less-effective drugs to save money, said...

Some patients take cheaper, less-effective drugs to save money, said Dr. Nicole Lapinel, associate director of Northwell Health’s Adult Cystic Fibrosis Center. Credit: Newsday/Howard Schnapp

For patients with cystic fibrosis, the advent of new medications over the past several years has meant significantly less time in hospitals, a better quality of life and improved lung function — if they take the drugs consistently, said Lapinel, a pulmonology and critical care physician.

But some patients take cheaper, less-effective drugs and endure worse symptoms to save money, she said.

Before the Inflation Reduction Act, there was no cap on out-of-pocket prescription payments. This year, Medicare imposed its first out-of-pocket cap — $3,300 to $3,800 for most plans. But patients must pay until they reach the cap. That led to some patients rationing medications at the beginning of the year, to spread out costs, Lapinel said.

A monthly payment plan for out-of-pocket prescription expenses, which goes into effect Jan. 1, will help prevent that, she said.

The $2,000 cap is only for Part D medications. Gorman-Plutzer puts a drug called Pulmozyme in her nebulizer to break up mucus in her throat — but because it is used with a medical device, it’s covered under Part B of Medicare, so it’s not applied toward the Part D cap. She is supposed to use Pulmozyme every day, but she skips it about half the time, because of the $800 monthly cost.

The issues Gorman-Plutzer has with Pulmozyme reflect Medicare’s complex and sometimes confusing rules.

$30G/month cancer medication

Jen Rindos, 55, of Hicksville, was put on Medicare in 2022, after the pain from her stage 4 breast cancer caused her to leave her job as a prekindergarten teacher and sign up for Social Security disability.

Her husband’s private insurance initially covered the cancer drug Orserdu, which with the high dosage she needed had a list price of about $30,000 a month, but the insurance company stopped covering after two months.

"It was very frustrating because my doctor said it was working," Rindos said. "It was shrinking my tumors."

Her doctor put her on Enhertu, an infusion covered by Medicare Part B that also is shrinking her tumors — but often leaves her with nausea, vomiting, headaches, fatigue and hair loss.

She is signing up for Part D so she can get back on Orserdu, if her doctor approves. Without the $2,000 cap, "It would be devastating for my family," Rindos said.

Medicare-approved plans must cover all cancer drugs, but for most categories of drugs that are targeted to treat a certain disease or condition, plans must only cover at least two medications — and can choose to favor cheaper, less-effective drugs, said Gretchen Jacobson, vice president of Medicare at the Manhattan-based Commonwealth Fund, which supports health care research.

That’s one reason Medicare beneficiaries should shop around each open enrollment period — which this year ends Dec. 7 — before choosing a Part D plan.

"People can't assume just because their drug was covered in this past year that it'll be covered by their plan next year," she said.

Negotiated drug prices

The $2,000 cap is one of many changes in the Inflation Reduction Act that will reduce drug costs for some Medicare beneficiaries, especially those taking expensive medications, and for the Medicare system.

Some of the changes from the 2022 legislation, such as giving Medicare the authority to negotiate drug prices, won't take full effect for several years. The first 10 drugs subject to negotiation have maximum prices 38% to 79% lower than the list prices, starting in 2026. Negotiations for 90 more drugs will take place over the next five years. 

The law also limits the monthly price of insulin to $35, requires drug companies that raise prices higher than the inflation rate to pay a rebate for the excess amount to Medicare and requires insurance companies — rather than Medicare — to pay a much higher percentage of drug costs after a policyholder reaches the $2,000 cap.

Medicare Part D changes

The 2022 Inflation Reduction Act included major changes to the prescription drug program of Medicare Part D, which covers 54 million Americans. The law is being phased in over time.

2022

Medicare begins requiring drug companies that raise prices of almost all covered Part D drugs more than the inflation rate to pay the government a rebate equal to any excess increase.

2023

Out-of-pocket costs for Medicare beneficiaries receiving insulin are limited to a maximum of $35 a month.

All federally recommended adult vaccines are free to beneficiaries.

2024

Medicare, which for the first time was allowed to negotiate prices for a certain number of drugs each year, announces the new maximum cost of the first 10 Part D drugs selected. Prices will be 38% to 79% lower than the list price starting in 2026.

A program for enrollees with low incomes and resources that fully subsidizes premiums and significantly limits drug copayments is expanded.

2025

A $2,000 annual cap in out-of-pocket prescription drug expenses will take effect along with a monthly payment plan for expenses.

The government will begin requiring insurers to pay for a higher percentage of drug costs beyond the cap, reducing Medicare's share of expenses.

Medicare will begin negotiating the maximum prices for 15 more Part D drugs and announce the revised costs by November. The new prices go into effect in 2027.

2026-2029

The government will negotiate the price for 75 more drugs – this time Medicare Part B as well as Part D medications. 

SOURCES: Centers for Medicare and Medicaid Services, KFF

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