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Biden signs Inflation Reduction Act into law, aiming to reduce health care costs

Kyle Shields

This article first appeared on Healio

Key takeaways:

  • The legislation will reduce premiums by $800 for 13 million Americans covered under the Affordable Care Act.
  • For Medicare beneficiaries, the cost of insulin is capped at $35 a month.
  • The bill also included new taxes and investments to combat climate change.

President Joe Biden signed a bill into law on Tuesday meant to lower health care costs for millions of Americans, in what the White House called “a historic legislative achievement.”

The Inflation Reduction Act, which was passed by both the House and the Senate last week, will cap out-of-pocket pharmacy costs at $2,000 per year for 50 million Americans with Medicare Part D, according to the White House statement, and will directly benefit an estimated 1.4 million beneficiaries every year.

The legislation will also reduce premiums by $800 for 13 million Americans covered under the ACA and extend subsidies for plans under the ACA for 3 years.

Ryan D. Mire, MD, FACP, president of the ACP, wrote in a statement that the increased subsidies for health insurance plans purchased on the ACA health insurance exchanges “have led to record numbers of Americans gaining access to health insurance.”

Insulin costs will now be capped at $35 monthly, benefiting 3.3 million Medicare beneficiaries with diabetes, according to the statement. With the provision that allows Medicare to negotiate prescription drug costs, an additional 5 to 7 million Medicare beneficiaries could also benefit from lower prices, according to the White House.

Mire wrote that the bill “will help millions of Americans better access necessary health care services and treatments.”

“Allowing Medicare to negotiate with pharmaceutical manufacturers for lower drug prices and capping the cost of insulin for beneficiaries are both necessary steps that ACP has long supported as tactics to tackle the rising cost of prescription drugs.”

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PERSPECTIVE

Rita K. Kuwahara, MD, MIH

As physicians, we have advocated for years to make medicines affordable for our patients, as it is unconscionable that our patients must choose between buying their lifesaving medicines and keeping a roof over their heads.

Today’s enactment of the Inflation Reduction Act of 2022 represents a historic step forward for our nation and gives us the tools to begin to meaningfully improve our patients’ access to affordable medicines and care, as well as to start addressing the health effects of climate change.

We must applaud our members of Congress and President Biden for coming together to pass and sign the Inflation Reduction Act into law, and while it is important to celebrate this landmark achievement, our work is only just beginning.

For the first time, Medicare will be allowed to negotiate the prices of 10 medicines in 2026 and 20 medicines in 2029, and starting in 2025, those with Medicare Part D coverage will have their annual out-of-pocket spending on prescription drugs capped at $2,000. Further, people with diabetes covered by Medicare will have access to insulin for $35 per month. In addition, middle class families will continue to be eligible for subsidies on the ACA marketplace for another 3 years, first enacted by the American Rescue Plan, making access to health care affordable for more families and preventing families from losing health insurance coverage. As a nation, we are also making a critical investment in tackling climate change, which will be important in subsequently addressing the associated health effects.

Each of these provisions is life-changing for our patients and we must ensure that the Inflation Reduction Act is fully implemented to optimally improve our patients’ health outcomes.

As we enter this next phase of implementation, we must praise HHS and CMS for their commitment to implementing this vital new law, and we must ensure that adequate resources, infrastructure and support are provided to fully implement each of the critical provisions included in the Inflation Reduction Act, so that we may improve the health of our patients and our nation.

Rita K. Kuwahara, MD, MIH
Healio Primary Care Peer Perspective Board member
Primary care internal medicine physician
Health policy fellow, Georgetown University
National Vice Chair, American Medical Women’s Association’s Policy and Advocacy Committee
National Vice Chair, Doctors for America’s Access to Affordable Care Impact Area
Disclosures: Kuwahara reports no relevant financial disclosures.
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