Democratic senators introduced legislation June 25 that would cap out-of-pocket costs for traditional Medicare beneficiaries.
The Medicare Cost Cap Act would install a $5,000 annual cap for Parts A and B cost-sharing — including deductibles, copays and coinsurance — beginning in 2028. Once the cap is hit, Medicare would pay 100% of covered costs for the rest of the year. The cap would change each year based on per capita Medicare spending growth.
The bill would also expand the low-income subsidy and Medicare savings programs. Beginning that same year, the bill would align the income eligibility threshold for these programs at 200% of the federal poverty level. The bill would cut a resource ceiling that may disqualify some beneficiaries. A two-way automatic eligibility recognition would also go into effect for the programs.
A June 25 Senate Finance Committee news release said, over a decade, more than 52% of beneficiaries are anticipated to surpass the $5,000 cap at least once. The bill would save enrollees $1,024 on average per year. In 2028, 3.2 million Medicare beneficiaries are projected to directly benefit from the cap, according to the release.
The bill did not outline a funding mechanism, but Medicare’s Hospital Insurance Trust Fund, which finances Part A, is expected to face a funding cliff by 2033. KFF reported Andrew Ryan, PhD, of the Providence, R.I.-based Brown University School of Public Health said, with the proposed cap, analysts estimate potential costs of at least $50 billion per year.
Earlier this year, a $2,100 annual cap on out-of-pocket prescription drug costs for Medicare beneficiaries with Part D coverage went into effect. There was a $2,000 limit set for 2025, and, like the bill proposes, that cap can be adjusted each year based on drug spending trends.
Medicare Advantage plans currently have an out-of-pocket limit of up to $9,250 for in-network services, but plans themselves can lower that cap, according to KFF.
