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

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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