Out-of-Pocket Cost of Arthritis Treatments to Be Cut by New Law

Congress and the administration have listened to the Arthritis Foundation and other nonprofit organizations about the urgency of removing barriers to affordable health care for the millions of Americans living with chronic and serious medical conditions like arthritis.

The passage of the Inflation Reduction Act (IRA) is a key step forward in addressing expensive out-of-pocket costs in Medicare and other provisions. The act will help solve affordability challenges faced by arthritis patients, many of whom rely on Medicare Part D to meet their medication needs. For those with high-cost drugs, an out-of-pocket cap can improve adherence, health outcomes and health equity.

In addition, the “smoothing” mechanism of the IRA will allow patients to spread costs out over the course of a plan year, enabling them to make their payments in manageable amounts. Along with the out-of-pocket cap, it will serve as strong protection for patients and has been one of the Arthritis Foundation’s top priorities.

Arthritis Patients React

Patients like Penny Greenblatt of California, who has been battling psoriatic arthritis for almost four decades, will no longer have to fear being unable to afford the medications she needs.

“As a senior on Medicare, out-of-pocket costs can be prohibitive, necessitating a switch to a cheaper, and possibly less effective, medication,” she says. “I, like many other seniors with inflammatory arthritis, have had to switch from a highly-effective, self-administered medication to an infusion that is billed to Medicare Part B.”

Greenblatt, who volunteers as an Arthritis Foundation Advocate and facilitator of a Live Yes! Connect Group, says her options have been very limited. “If they don’t work well or cause negative side effects, the patient is out of options. With a cap on what patients must pay each year, I won’t have to worry about the risk of my symptoms getting worse or overall deterioration of my ability to function.”

Rick Phillips of Indiana, who has lived with type 1 diabetes and rheumatoid arthritis for many years and serves as a member of the Arthritis Foundation’s Patient Leadership Council, says he is relieved that Medicare Part D costs will be capped.

“For those of us who use biologic medications, it’s literally the difference between being healthy and losing everything,” he says. “I will no longer have to demand that my rheumatologist keep me on an infused medication that is not working well instead of using an injectable I cannot afford.”

“I dreamed of the day that those on Medicare could reasonably afford medications,” Phillips continues. “This law does that. Thank you to the Arthritis Foundation for advocating for patients and to members of Congress who stood up for us.”

What Does the New Act Mean for You?

Key provisions of the law include:

• A cap on drug spending for Medicare enrollees. Medicare Part D enrollees will have a $2,000 annual cap on spending for outpatient prescription drugs. After reaching that limit, remaining drug costs will be paid for by a combination of the federal government, private insurers and drug companies. Taking effect in 2025, this provision allows Medicare Part D enrollees to break the $2,000 maximum into several affordable monthly payments.
• Elimination of the fee in Medicare after reaching the “catastrophic” threshold. Starting in 2024, Medicare enrollees will no longer have to pay a 5% coinsurance fee after hitting the threshold, which is usually about $7,050 for out-of-pocket drug costs. This provision, along with the drug spending cap, is a major win for the many arthritis patients who have trouble paying for costly, yet necessary, medications.
• Lower drug prices for Medicare Part D patients. Medicare will be able to negotiate the price of up to 20 high-cost prescription drugs, which may include costly arthritis medications. Price reductions for 10 medications will take effect in 2026 and up to 20 medications by the end of 2029. The law also caps out-of-pocket insulin expenses at $35 per month for Medicare beneficiaries.
• Free vaccines. The pandemic underscored the critical role of vaccines for overall health, especially for inflammatory arthritis patients and those taking immunosuppressive medications. Starting in January 2024, certain vaccines recommended by the CDC will be free for seniors on Medicare and adults on Medicaid. This includes the shingles vaccines, which now often cost more than $50.
• Extension of Affordable Care Act (ACA) health insurance subsidies. Federal health insurance subsidies enacted by the Biden administration will extend for three more years. These subsidies, which lower private insurance costs purchased through ACA, will help around 13 million people stay insured.

While urging lawmakers to enact those provisions, the Arthritis Foundation and partner organizations also stated:

As Congress works to expand access and limit financial barriers to care, it is important that other barriers not be created and that patient protections are in place that preserve access to needed care.

One way in which Congress can do this is to reinvest savings achieved by reconciliation and direct those resources towards continued improvements to patient access and affordability, and to hold the Centers for Medicare and Medicaid Services accountable for any changes they may implement that create barriers to appropriate care.

We stand ready to work with Congress to address these concerns, which are so critical to the patients we represent.

If you have questions about how the IRA may help patients like you, call our Helpline at 800-283-7800, or visit arthritis.org/helpline.