Thousands of Iowans on Medicare Prescription Drug Plans to See Savings from New Out-of-Pocket Cap

AARP released a report on August 28 that shows an estimated 27,348 Iowans on Medicare prescription drug plans will see savings thanks to a new out-of-pocket cap that starts January 1, 2025. The savings, thanks to a provision in the 2022 Inflation Reduction Act that AARP championed, will cap out-of-pocket prescription drug costs every year at $2,000.

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 Iowa and across the country by lowering drug prices and out-of-pocket costs,” said Paige Yontz, Advocacy Manager of AARP Iowa which serves more than 329,000 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 Iowa 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.”

Leslie Elam from Mount Vernon shared that the cap will be a welcome change. “Paying for essential medications that cost over $2,000 makes life really difficult for people on a fixed income,” said Elam. “I want to be able to enjoy my retirement without having to worry about whether I’ll be able to afford my meds.”

The full report and a fact sheet on the findings is available at www.aarp.org/partdspendingcap.