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NEW AARP Report: Impact of Historic Medicare Rx Out-of-Pocket Spending Cap on New Jersey Seniors
Posted on 08/28/24
Savings Possible Thanks to the Prescription Drug Law Championed by AARP
NEW BRUNSWICK, NJ - Today, AARP released a report that shows an estimated 143,427 of New Jerseyans on Medicare prescription drug plans will see savings thanks to a new out-of-pocket cap that starts January 1, 2025. The savings are made possible by a provision in the 2022 prescription drug law that AARP championed which caps out-of-pocket prescription drug costs every year, beginning at $2,000 next year, for America’s 56 million Medicare drug plan enrollees.
The AARP report analyzes the number of enrollees who will benefit from the cap by state, age, gender, and race between 2025 and 2029. The findings indicate that Medicare drug plan enrollees nationwide who reach the new out-of-pocket cap will see average savings of roughly $1,500, or 56%, in 2025 for their prescription drugs.
AARP fought hard for the prescription drug law of 2022 because we knew it would provide crucial relief for Medicare enrollees here in New Jersey and across the country by lowering drug prices and out-of-pocket costs,” said Chris Widelo, State Director of AARP New Jersey, which serves more than 1.1 million members age 50 and older in the state “Knowing they won’t pay a dime over $2,000 next year – maximum – for prescription drugs they get at the pharmacy gives New Jersey seniors on Medicare drug plans some peace of mind as they struggle to keep up with rising costs for other everyday essentials like housing, groceries and utilities.
AARP NJ continues its fight to lower prescription drug costs and has successfully advocated for legislation that expands access to the Pharmaceutical Assistance to the Aged & Disabled (PAAD) and Senior Gold programs. Starting January 1, 2025, out-of-pocket caps for state-regulated insurance will be set at $25 for epi-pens, $50 for asthma inhalers, and $35 for insulin,” said Crystal McDonald, Associate State Director of Advocacy of AARP New Jersey and Prescription Drug Affordability Council Board Member. Additionally, after a multi-year effort, the governor and legislature established a Prescription Drug Affordability Council to tackle high drug prices. This expert panel will increase transparency and recommend ways to make prescriptions more affordable in New Jersey.
Other findings from the report include:
- Between 3 and 4 million Part D plan enrollees nationwide are estimated to benefit from the new out-of-pocket cap every year between 2025 and 2029, including 180,604 here in New Jersey.
- By 2029, the share of enrollees benefiting from the new out-of-pocket cap is estimated to be 10 percent or higher in 19 states, including New Jersey, plus the District of Columbia.
- More than three-quarters of Medicare drug plan enrollees who will benefit in 2025 are between the ages of 65 and 84.
Limiting how much seniors on Medicare drug plans pay for prescription drugs every year builds on other new and important cost-saving measures, such as capping insulin co-pays at $35 a month and making many vaccines, such as shingles and pneumonia, free, said Widelo.
To learn more about AARP’s work to lower prescription drug prices, visit How High Rx Prices Hurt.
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About AARP
AARP is the nation's largest nonprofit, nonpartisan organization dedicated to empowering Americans 50 and older to choose how they live as they age. With a nationwide presence, AARP strengthens communities and advocates for what matters most to the more than 100 million Americans 50-plus and their families: health security, financial stability and personal fulfillment. AARP also works for individuals in the marketplace by sparking new solutions and allowing carefully chosen, high-quality products and services to carry the AARP name. As a trusted source for news and information, AARP produces the nation's largest circulation publications, AARP The Magazine and AARP Bulletin. To learn more, visit www.aarp.org/about-aarp/, www.aarp.org/español or follow @AARP, @AARPenEspañol and @AARPadvocates on social media.
