Starting Jan. 1, older adults on Medicare will spend no more than $2,000 a year on prescription drugs when a new price cap on out-of-pocket payments from the Inflation Reduction Act goes into effect.

Medicare recipients will see a major change as out-of-pocket prescription drug costs are capped at $2,000 per year under the Inflation Reduction Act. Experts say the new cap could bring much-needed relief to cancer patients,

Medicare's $2,000 prescription drug cap will take effect at the start of the new year. Why it matters: The yearly limit on out-of-pocket payments, under the Inflation Reduction Act, is expected to lower millions of seniors' medical costs.

Medicare recipients will see a $2,000 out-of-pocket cap on some prescription drugs as part of several new provisions coming in 2025.