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Medicare's new $2,000 prescription drug cap goes into effect Jan. 1. Here's how it works.

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Medicare 's $ 2,000 out-of-pocket cost cap on prescription drugs goes into effect on Jan. 1 .

The yearly price cap has since been signed into law by President Joe Biden .

About 3.2 million Medicare recipients are likely to see lower costs due to the new rule.

Before the law, there was no cap for Medicare 's Part D, the section that covers prescription drugs.