The climate and healthcare legislation that Congress is set to approve later this week includes the most important improvements to the Medicare program in nearly two decades. The changes aim to address one of the biggest concerns of seniors: the fast-rising cost of prescription drugs.

The U.S. Senate passed the sweeping $430 billion bill on Sunday. The House of Representatives will likely vote on it on Friday and it will then head to President Joe Biden for his signature.

The Inflation Reduction Act of 2022 empowers Medicare to negotiate the price of a small number of high-cost drugs with pharmaceutical companies for the first time, starting in 2026. That’s an important step toward fixing one of the most egregious flaws in the legislation that created the Part D prescription drug program in 2003 – a provision that specifically forbids Medicare from negotiating prices.

As big as negotiating drug prices may turn out to be over the long haul, the bill makes other important changes to prescription drug coverage that will impact the pocketbooks of seniors, starting next year.

The bill includes reforms that should begin to reduce Medicare drug costs, starting next year, and phases in additional important changes in following years. A critical change is a cap on total annual out-of-pocket costs that will be phased in over two years, starting in 2024. Another is a $35 cap on monthly insulin costs (Note: the provision capping insulin for people enrolled in private insurance plans was stripped from the bill, but retained for Medicare enrollees). 

In my Reuters Money column this week, I examine the key changes to expect in Medicare – and when they will roll out.