For years, Medicare patients faced devastating financial burdens while battling cancer. Even with insurance coverage, out-of-pocket costs for oral cancer medications frequently exceeded $10,000 annually—until now. The Inflation Reduction Act (IRA) has introduced groundbreaking changes to Medicare Part D that took effect in 2025, capping all beneficiaries’ annual out-of-pocket drug costs at $2,000. But there’s more to this story: researchers from the University of Pennsylvania’s Perelman School of Medicine have identified an often-overlooked voluntary program within the IRA that could dramatically improve medication affordability for Medicare patients requiring expensive oral cancer treatments.
Cancer Treatment Costs: Before and After Reform
Prior to the IRA’s implementation, Medicare patients faced uncapped annual out-of-pocket expenses. Under the standard Medicare Part D benefit in 2023, patients were responsible for a $505 deductible, followed by 25% coinsurance until reaching the catastrophic coverage threshold. Even after hitting this threshold, patients still paid 5% coinsurance for the remainder of the calendar year.
This payment structure, combined with the high monthly prices of cancer medications, resulted in staggering financial burdens for patients. A new study published in JCO Oncology Practice reveals just how significant these costs were—and how dramatically they’ve changed under the IRA.
The Financial Burden: Crushing Numbers
Researchers calculated Medicare patient out-of-pocket costs for oral cancer medications under three different scenarios:
- The standard Medicare Part D benefit before any changes
- The new annual Part D out-of-pocket maximum introduced by the IRA
- The annual out-of-pocket maximum plus enrollment in the voluntary Medicare Prescription Payment Plan (MPPP)
Before the IRA, annual out-of-pocket costs for oral cancer drugs could exceed $11,000, with much of this expense due early in the year. The lowest calculated cost was $11,143 for enzalutamide (used to treat prostate cancer), while the highest reached a staggering $20,592 for the dabrafenib/trametinib combination regimen (used for certain melanomas and thyroid cancers).
The IRA’s Transformative Impact
The IRA’s changes have dramatically reduced this financial toxicity. Beginning in 2025, out-of-pocket costs for these medications are now capped at $2,000 annually—representing an 82-90% reduction for the ten drugs studied. This change alone is revolutionary for cancer patients on Medicare who previously faced impossible financial choices.
However, there’s still a critical challenge: under standard implementation, this entire $2,000 would come due with the first prescription filled in January for each medication. Previous research by the same team demonstrated that when confronted with such high upfront costs, 42% of Medicare beneficiaries abandoned their oral cancer treatments—potentially allowing their cancer to progress or recur.
The Game-Changer: Monthly Payment Plan Option
This is where the Medicare Prescription Payment Plan (MPPP) becomes crucial. This voluntary program—based on ideas first proposed by the Penn research team—allows Medicare Part D beneficiaries to spread their out-of-pocket costs in monthly payments throughout the calendar year starting in 2025.
For patients who enroll in the MPPP in January, costs for each of the ten studied drugs would be reduced to approximately $167 per month ($2,000 spread across 12 monthly payments). This approach makes life-saving medications consistently affordable throughout the year.
Timing Matters for Maximum Benefit
“Timing is everything—patients who enroll early in the year will benefit the most since they will have more months to spread the payments,” notes lead researcher Dr. Jalpa Doshi. “Oncology providers have a critical role to play in ensuring that Medicare patients to whom they prescribe expensive oral cancer medications are aware of the MPPP and the benefits of early enrollment in the year.”
Improving Treatment Adherence Through Affordability
The impact of these changes extends beyond mere cost savings. By making treatments more affordable, these policy changes directly address the problem of treatment abandonment. When patients can afford their medications consistently, they’re more likely to adhere to prescribed treatment regimens—potentially improving survival outcomes and quality of life.
The ten medications examined in the study are commonly used for various high-prevalence cancers, treating tens of thousands of Medicare patients annually. Making these treatments financially accessible represents a significant public health advancement.
The Path Forward for Cancer Patients
For Medicare beneficiaries battling cancer, these changes offer new hope. The combination of the $2,000 annual cap and the MPPP monthly payment option creates a financial lifeline that could mean the difference between continuing or abandoning life-saving treatment.
Healthcare providers, patient advocates, and policy experts should now focus on ensuring widespread awareness of these programs—particularly the voluntary MPPP enrollment option. For maximum benefit, patients need to understand the importance of early enrollment to spread costs across the full calendar year.
This policy transformation represents one of the most significant improvements to cancer care affordability in Medicare’s history, potentially saving lives by making critical medications accessible to those who need them most.
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