Copay caps on prescription drug costs could slow the growth of retirees' expected healthcare costs, a report from Fidelity found.
The report, published June 21, estimated a 65-year-old retiring in 2023 can expect to spend $157,500 in medical costs throughout retirement, with Medicare coverage.
The amount is the same as in 2022, the first time the estimate has remained flat in nearly 10 years, according to Fidelity.
"Our analysis finds that limits on how much retirees can spend on prescriptions covered by Medicare Part D from the Inflation Reduction Act are likely to temporarily offset the overall inflationary trend of healthcare costs for retirees," Hope Manion, senior vice president and chief actuary of Fidelity Workplace Consulting, said in a news release.
Several provisions of the Inflation Reduction Act intended to reduce costs for Medicare beneficiaries take effect in the coming years. In 2024, Part D enrollees who have drug costs so high they enter the catastrophic phase of coverage will not owe any additional copays, and Part D premiums will be capped at a maximum price increase of 6 percent annually through 2029.
Beginning in 2025, out-of-pocket drug costs in Medicare Part D will be capped at $2,000 annually.