The Inflation Reduction Act Lowers Health Care Costs for Millions of Americans
As promised, President Biden is making good on his promise to make prescription drugs and health insurance more affordable and to put the economy to work for working families by passing the Inflation Reduction Act. Millions of Americans in all 50 states, the District of Columbia, and the U.S. territories will receive significant cost savings thanks to this law.
- lower prescription drug prices in Medicare through price negotiation with manufacturers,
- a yearly cap ($2,000 in 2025) on out-of-pocket prescription drug costs in Medicare, and
- continued lower health insurance premiums through HealthCare.gov and the state-based Marketplaces.
The Medicare population will gain from both reduced drug prices and a more efficient prescription drug coverage system.
Inflation Reduction Act Lowers Health Care Costs
More than 5 million Medicare recipients had trouble paying for their medications before the Inflation Reduction Act was passed. Low-income individuals and those under the age of 65 are disproportionately likely to forego medical treatment due to high costs. Millions of Medicare recipients will see reduced drug costs thanks to changes made to the program as a result of the Inflation Reduction Act.
Each type of insulin available to a Medicare patient who uses a Medicare-approved prescription drug plan or who uses a traditional insulin pump and who is enrolled in Traditional Medicare will cost no more than $35 for a 30-day supply. Covered insulin products won’t require the patient to meet a deductible, either. Both traditional insulin pumps covered by Traditional Medicare’s durable medical equipment benefit and prescription insulin covered by Medicare Part D plans will be subject to the new regulations beginning on January 1, 2023. At least 1.4 million Medicare recipients will benefit from the new limit placed on their out-of-pocket expenses for insulin as a result of this amendment.
Individuals enrolled in Medicare prescription drug coverage who incur high enough drug costs to enter the catastrophic phase of Medicare prescription drug coverage will no longer be responsible for paying any cost-sharing toward their catastrophic phase prescription drugs beginning in 2024.
Beginning in 2024, low-income Medicare recipients (those making less than 150% of the federal poverty level) will be eligible for increased assistance paying for prescription drug coverage. Medicare beneficiaries will have an easier time affording their drug coverage premiums and co-payments as a result of this change.
In 2025, the annual out-of-pocket limit for people with Medicare prescription drug coverage will be capped at $2,000. Additionally, beginning in 2025, they will be able to spread out the cost of their annual prescriptions into 12 equal monthly payments.
Individuals with Medicare will have better access to potentially life-saving treatments at lower out-of-pocket costs thanks to Medicare’s newly acquired negotiating power in the pharmaceutical industry.
The average annual expenditure on prescription drugs in the United States is over $1,500. In addition, costs are generally much higher than in other countries. There is a lack of market competition, which contributes to the higher prices of pharma. Prescription drug costs for Medicare recipients will go down as a result of increased competition brought about by the Inflation Reduction Act.
Medicare’s mandate to negotiate drug prices spurs innovation in the pharmaceutical industry as companies seek to maintain a competitive edge in the market. The results of this competition will hopefully lead to innovative therapies and delivery methods. Drug prices have been negotiable for health programs run by the Departments of Defense, Veterans Affairs, and the Indian Health Service for decades. As a result of the new legislation, Medicare will be able to negotiate drug prices directly with manufacturers, leading to lower prices for some of the most expensive prescription drugs for Medicare recipients.
Bill Gates admits he was “Personally Involved” in the Inflation Reduction Act Climate Change Funding. This Act will funnel US$737 billion into Bill Gates funded projects including wind, solar, hydrogen, carbon capture and storage. pic.twitter.com/O16pzLAasv
— Pelham (@Resist_05) October 6, 2022
Medicare is strengthened by the Inflation Reduction Act for current and future beneficiaries. By reducing Medicare’s spending on prescription drugs and capping price increases, it improves access, equity, and affordability in health care.
Cost sharing for recommended vaccines is reduced or eliminated under the Inflation Reduction Act, which benefits beneficiaries of Medicare, Medicaid, and the Children’s Health Insurance Program.
The new law extends the increased financial help that was put in place by the American Rescue Plan, resulting in lower premiums for healthcare coverage on HealthCare.gov and state-based Marketplaces for many consumers through 2025.
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