By Suzanne Potter, California News Service

September 12, 2024 (Sacramento) --Hundreds of thousands of older Californians will see huge savings on prescription drugs starting in January, according to a new report from AARP.

That's because the Biden administration's Inflation Reduction Act caps prescription drug costs at $2,000 per year for people on Medicare, starting in 2025.

An estimated 271,000 people in the Golden State will hit the out-of-pocket maximum next year, Nina Weiler-Harwell, associate director of advocacy and community engagement for AARP California, said.

"Medicare drug plan enrollees nationwide who reach the new out-of-pocket cap will see an average savings of roughly $1,500," said Weiler-Harwell, "or 56% in 2025 for new prescription drugs."

On average, 40% of people on Medicare who reach the cap will save at $1,000 a year. And 12% will see savings of more than $3,000.