A new Medicare program caps the cost of expensive drugs
of ConsumerAffairsApril 28, 2025
Key takeaways
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Medicare Part D reforms under the Inflation Reduction Act now cap annual out-of-pocket drug costs at $2,000, offering significant relief from previous expenses that could exceed $10,000 for cancer patients.
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The new Medicare Prescription Payment Plan (MPPP) allows patients to spread their $2,000 maximum into affordable monthly payments, but early enrollment is crucial to maximize benefits.
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Awareness and timely enrollment in the MPPP are essential, as researchers emphasize that without proactive participation, many patients may continue to face financial barriers to critical cancer treatments.
Cancer treatments are very expensive, even for seniors on Medicare. But a new study from the University of Pennsylvanias Perelman School of Medicine found a new Medicare program that began this year could dramatically ease the financial burden faced by cancer patients needing expensive oral medications if they take full advantage of it.
Under the Inflation Reduction Act, annual out-of-pocket drug costs for Medicare Part D beneficiaries will be capped at $2,000, a sweeping change from the current reality where patients often face bills exceeding $10,000. However, researchers warn that without awareness of the newly introduced Medicare Prescription Payment Plan, patients may still struggle with the timing of those costs.
Until now, Medicares structure left patients facing heavy financial exposure. In 2023, patients paid a $505 deductible, 25% coinsurance until reaching a high threshold, and then 5% of drug costs indefinitely. This meant drugs like enzalutamide for prostate cancer could cost a patient over $11,000 a year, and combination regimens like dabrafenib/trametinib for melanoma and thyroid cancers could soar above $20,000 annually.
Even worse, a large portion of these payments was front-loaded into the early months of the year, leading to devastating upfront costs. Prior research by the Penn team found that 42% of patients abandoned treatment due to these early-year expenses a dangerous interruption that could allow cancers to grow or return.
Time is of the essence
The Medicare Prescription Payment Plan offers a simple but powerful solution: allowing patients to divide their annual $2,000 out-of-pocket maximum into monthly installments. Patients who enrolled in January 2025, for example, would pay about $167 per month.
High out-of-pocket costs often put these critical medicines out of reach and can lead to patients abandoning treatment, study lead author Jalpa Doshi said in a press release. The annual out-of-pocket maximum and MPPP together make it possible for Medicare Part D beneficiaries to greatly reduce these costs, on an annual and monthly basis.
However, Doshi emphasized that timing is critical. Patients must enroll early in the year to fully benefit from spreading out payments. Oncology providers, she said, must proactively inform patients about the MPPP and encourage early enrollment to prevent lapses in critical treatment.
More affordable treatments
The new cost-sharing caps under the IRA paired with monthly payment options through the MPPP represent an unprecedented opportunity to make lifesaving oral cancer drugs more affordable and accessible for Medicare beneficiaries, researchers said. Yet the success of these reforms hinges on awareness and enrollment.
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