Inflation Reduction Act Provision to Cap Medicare Drug Plan Increases at 6%

From 2024 through 2029, CMS will provide extra subsidies to keep the increase in the base premium from increasing a drug plan’s premiums by more than 6% per year, according to an analysis posted by Wakely, a health care consulting firm.

The 2023 base beneficiary premium is $32.74 per month.

Medicare Advantage Costs

The effective growth rate in plan costs could be 2.09% in 2024, but federal payment cuts related to decreases in quality ratings could lower revenue by 1.24%, CMS predicts.

Although the average Medicare Advantage patient health risk score will increase by 3.3%, a risk model change will offset most of that increase, officials say.

Insurers’ Reactions

Officials at two insurance industry groups, America’s Health Insurance Plans and Better Medicare Alliance, say they are still reviewing the advance notice but have concerns.

AHIP says it will provide “comprehensive, constructive feedback” during the notice comment period, and the Better Medicare Alliance says the notice would make “multiple complex technical changes.”

“We look forward to a thoughtful discussion with policymakers on these proposals,” the alliance says.

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