The $2,000 cap, included in the Inflation Reduction Act (IRA), helps to cap the cost of out-of-pocket prescription drugs for people who are on Medicare Part D starting in 2025. In other words, if you’re on Medicare Part D, you will not pay more than $2,000 a year for out-of-pocket prescription medications.

The $2,000 cap is just one provision in the IRA that helps to lower the costs of prescription drugs for Medicare beneficiaries. The IRA also capped the cost of insulin at $35 per month beginning in 2023, and it makes some recommended vaccines free.

Have questions about how the $2,000 cap or the IRA might affect your taxes or Medicare coverage? Book your appointment today to get your tax questions answered and talk taxes with the pros

Sharon Brucker, CPA Senior Tax Research Analyst Published on: September 15, 2025
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