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NEW AARP Report: Impact of Historic Medicare Rx Out-of-Pocket Spending Cap on Michigan Seniors

Rx Drug Prices are Skyrocketing

Savings Possible Thanks to the Prescription Drug Law Championed by AARP

Today, AARP released a report that shows an estimated 163,000 Michigan residents on Medicare prescription drug plans will see savings thanks to a new out-of-pocket cap that starts January 1, 2025. The savings are made possible by a provision in the 2022 prescription drug law that AARP championed which caps out-of-pocket prescription drug costs every year, beginning at $2,000 next year, for America’s 56 million Medicare drug plan enrollees.

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.

See the full report for a detailed breakdown of the cap’s impact by state.


“AARP fought hard for the prescription drug law of 2022 because we knew it would provide crucial relief for Medicare enrollees here in Michigan and across the country by lowering drug prices and out-of-pocket costs,” said Paula Cunningham, state director of AARP Michigan, which serves more than 1.25 million 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 Michigan 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.”

Other findings from the report include:

  • Between 3 and 4 million Part D plan enrollees nationwide are estimated to benefit from the new out-of-pocket cap every year between 2025 and 2029, including an average of 179,000 here in Michigan.
  • By 2029, the share of enrollees benefiting from the new out-of-pocket cap is estimated to be 10 percent or higher in 19 states, including Michigan, plus the District of Columbia.
  • More than three-quarters of Medicare drug plan enrollees who will benefit in 2025 are between the ages of 65 and 84.

“Limiting how much seniors on Medicare drug plans pay for prescription drugs every year builds on other new and important cost-saving measures, such as capping insulin co-pays at $35 a month and making many vaccines, such as shingles and pneumonia, free,” said Cunningham.

Learn more about the impact of the new Medicare Part D out-of-pocket spending cap and view the full report here and learn more about AARP’s work to lower prescription drug prices, visit How High Rx Prices Hurt.

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