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When President Joe Biden addresses Congress March 7 for his fourth State of the Union, he will ask lawmakers to expand the upcoming cap on out-of-pocket costs for Medicare prescription drugs

to private insurance as well. The president will also call on Congress to more than double the number of medications whose prices Medicare can negotiate each year.

A fact sheet released by the White House on March 6 says that in his speech, the president also "will reject any efforts to cut the Medicare or Social Security benefits that seniors and

people with disabilities have earned and paid into their entire working lives." For years, AARP has fought to protect those bedrock programs.

In 2025, Medicare enrollees with prescription drug plans will see their annual out-of-pocket costs capped at $2,000. This year, beneficiaries with medication expenses so high that they enter

what is called catastrophic coverage are already seeing relief from any additional out-of-pocket costs once they enter that coverage phase.

In the State of the Union address, the fact sheet says, Biden will call "on Congress to expand the $2,000 out-of-pocket cap to all private insurance so that all Americans have the peace of

mind that comes with knowing that they won't have to choose between filling their prescription or putting food on the table."

Another provision of the new drug law requires drugmakers who raise the prices of their products faster than the rate of inflation to pay rebates to Medicare. In his speech, Biden is calling

on Congress to make those same rebates apply to prescription drugs sold on the commercial market.

“That will save the federal government billions of dollars, further curb prescription drug price inflation, and reduce health insurance premiums for people with private health insurance

coverage,” the fact sheet says. 

Included in the 2022 prescription drug legislation is a historic provision that allows Medicare to, for the first time, negotiate the prices of some high-cost prescription drugs. The

administration is in the process of negotiating prices for the first 10 drugs selected under this new law.

In February, Medicare made its first price offers to the manufacturers of the first 10 drugs. All have agreed to participate in the negotiating process and all the drug companies have

submitted counteroffers. The U.S. Department of Health and Human will announce the first negotiated prices by Sept. 1. Those prices will take effect in 2026.

AARP has for years fought to allow Medicare to negotiate for lower prices of prescription drugs as part of its campaign to lower the cost of prescription drugs for older Americans. Under the

current law, 15 more drugs are scheduled to be negotiated in each of the next two years, and then 20 more drugs each subsequent year. Biden will propose that Medicare be allowed to

negotiate prices for at least 50 medications each year.

Dena Bunis covered Medicare, health care, health policy and Congress. She also wrote the “Medicare Made Easy” column for the AARP Bulletin. An award-winning journalist, Bunis spent decades

working for metropolitan daily newspapers, including as Washington bureau chief for the Orange County Register and as a health policy and workplace writer for Newsday.

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