IRA-mandated Free Vax Could Save Seniors More Than $230M

As of January 1, vaccines are now free under Medicare Part D, and include vaccines for Tdap and shingles.

Seniors and people with disabilities could save more than $230 million in out-of-pocket costs for vaccines now covered for free under Medicare Part D, thanks to the newly enacted Inflation Reduction Act, the Department of Health and Human Services says in a new report.

HHS's Office of the Assistant Secretary for Planning and Evaluation reports that the 3.4 million of 51 million Medicare Part D enrollees who received covered vaccines in 2021 paid $70 on average for these vaccines for a total of $234 million.

As of January 1, those vaccines are now free, and include vaccines for tetanus, diphtheria, and pertussis (Tdap) and shingles, which can otherwise cost seniors almost $200.   

The ASPE report was based on 2021 figures, but HHS believes the future savings will be even greater because more seniors are likely to get vaccinated when it's free. In addition, the expanded vaccinated senior population could also result in lower downstream healthcare costs that arise from otherwise vaccine-preventable diseases. The free vaccines are also expected to improve racial and ethnic access.  

The report examines vaccine use, total vaccine spending, and out-of-pocket spending for vaccines that are covered under Medicare Part D: shingles; tetanus/diphtheria (Td); tetanus, diphtheria, and pertussis – also known as whopping cough (Tdap); hepatitis A; and hepatitis B. Medicare Part B already covers flu, pneumococcal, COVID-19, and certain other vaccines without cost-sharing for people with Medicare. 

Most vaccinations covered by Medicare Part D are for shingles prevention, which account for about 82% of total vaccine costs for enrollees. On average, enrollees pay $77 out of pocket for the shingles vaccine – but for some seniors the vaccine can cost almost $200, $51 for the hepatitis B vaccine, and $28 for the Tdap vaccine, HHS says.

Out-of-pocket costs were even higher for people who did not receive the Part D Low-Income Subsidy: $95 for shingles, $81 for hepatitis B, and $73 for other vaccines.  

A state-by-state breakdown of shows that California ($20 million), Florida ($18 million), and Texas ($14 million) had the highest total beneficiary out-of-pocket costs for all Part D vaccines, with average enrollee savings of $51 per person in California, $79 per person in Florida, and $69 per person in Texas.

South Dakota seniors ($142.39) had the nation's highest out-of-pocket costs, while the District of Columbia (32.74) had the lowest.

The IRA also capped seniors' out-of-pocket costs for insulin at $35 a month, and a recent ASPE  report estimates that 1.5 million Medicare beneficiaries will save $500 per year on insulin because of the new law.