New Study Underscores IRA’s Successes, Opportunities for Future Reforms

A recent JAMA article found two key Inflation Reduction Act (IRA) prescription drug provisions that took effect in 2024—the elimination of coinsurance for catastrophic coverage and the expansion of the Part D low-income subsidy—improved medication adherence among Medicare beneficiaries.

Using data from 2021 to 2024, the authors compared the experiences of adults with Medicare Part D to those with private insurance. They excluded beneficiaries with very low incomes and those who use insulin, because their out-of-pocket costs were already limited under existing policies.

Overall, they observed a 4.9–percentage point reduction in cost-related medication nonadherence among those with Medicare. Notably, this is “greater in magnitude” than the reduction observed in the first year of the Medicare Prescription Drug Improvement and Modernization Act, the law that established Medicare Part D, making drug coverage available for many older adults and people with disabilities who previously had gone without.

Study Goals

As of June 30, 2024, 1.5 million beneficiaries had saved close to $1 billion from the IRA’s elimination of the 5% coinsurance requirement for catastrophic coverage, which effectively capped out-of-pocket prescription drug costs at $3,300 per year.

In addition, by that date the law had expanded the full Part D low-income subsidy (LIS, also known as Extra Help) to individuals with incomes between 135% and 150% of the federal poverty level who had previously received only partial subsidies. This expansion was projected to save nearly 500,000 beneficiaries approximately $120 million, reducing their out-of-pocket drug spending by 80%.

The study’s authors sought to understand other impacts of these provisions. Specifically, whether they were decreasing cost-related medication nonadherence (e.g., skipping or reducing medication doses and delaying or foregoing prescription fills due to cost) and health care–related strain, which they define as inability to pay and worries about medical bills.

Study Findings

The results were mixed. While the IRA policies considerably improved medication adherence, they did not move the needle on financial strain.

According to the authors, some cost concern persistence may be due to the study’s timeline. They suggest “the savings realized in the first year may not have been substantial enough to reduce preexisting medical debt or alleviate anxiety about future medical expenses.” Further, the study does not account for IRA policies that have taken effect since 2024—such as the $2,000 annual cap on out-of-pocket prescription drug costs that began in January 2025—which the authors expect “will provide even greater financial protection that could further reduce cost-related medication nonadherence among Medicare beneficiaries.”

However, they caution that those savings could be underrealized if Medicare Part D plans increase costs elsewhere. This makes ongoing evaluation “critical for understanding the full impact of the IRA and for designing future reforms that reinforce, rather than erode, the gains we observed.”

Broader Affordability Trends

The study’s authors also note that broader affordability trends, such as “inflationary pressures” and “rising premiums” may have played a role in beneficiary experiences with financial strain. This echoes recent KFF polling, which found that as health care costs continue to grow and cost-of-living increases further stress household budgets, paying for care and coverage tops the list of consumer financial concerns. Last month, 64% of households said they were “very” or “somewhat” worried about affording health care. This is a higher rate than those who were worried about meeting other basic needs, like monthly utilities (57%), food and groceries (57%), rent or mortgage (52%), and transportation (52%).

Impacts for Future Policymaking

The study offers evidence that the 2024 IRA provisions have lowered barriers to medication adherence, which can in turn boost health outcomes and lower costs. These findings build on prior evaluations of other IRA provisions with similar aims: The law’s $35 monthly cap on covered insulin products and its elimination of cost sharing for vaccines have both been found to bolster affordability and uptake. This growing evidence base indicates that replicating and expanding these approaches could prove effective in Medicare and beyond.

The IRA may yet prove to reduce health care–related financial strain, but the authors suggest policymakers may need to target drivers beyond prescription drugs costs, such as “rising premiums and deductibles; gaps in coverage for dental, vision, and long-term care; and the growing backlog of unpaid medical bills.”

The Medicare Rights Center agrees that a more comprehensive policy approach is critical. We continue to support strategies to improve access to affordable health care and prescription drug coverage, as well as policies that otherwise strengthen financial security.

For More Information

Read the JAMA article, Cost-Related Medication Nonadherence After the Inflation Reduction Act.

Read the KFF polling, Eight Trends Shaping 2026 Healthcare Costs.