Inflation Reduction Act 2nd Anniversary

In August 2022, the Biden-Harris Administration passed the Inflation Reduction Act (IRA), a wide-reaching piece of legislation that ushered in sweeping changes to everything from climate and industrial policy to healthcare. The Inflation Reduction Act introduced a number of policies lowering healthcare costs and expanding access. As the law has begun to take effect over the past two years, here’s how the IRA has improved healthcare for Americans.

Improving Medicare for Seniors

Roughly 53 million Americans are covered by Medicare Part D, a program that helps cover the costs of prescription drugs for seniors and people with disabilities. Many with coverage are on fixed incomes and are extremely sensitive to price fluctuations brought about by inflation. Here’s how the Inflation Reduction Act benefits them:

• In January 2024, the Inflation Reduction Act expanded the program to cover more drug costs for almost 300,000 people with limited resources under the Extra Help Program/low income subsidy program (LIBS),

• The co-pay for insulin has now been capped at $35 for a 30 day supply
• Since January 1, 2023 the Inflation Reduction Act (IRA) eliminated enrollee cost-sharing for recommended vaccines covered under Medicare Part D such as shingles and Tdap. This benefits more than 3.4 million people

Since October 1, 2023, all states must provide coverage for all recommended adult vaccines without cost sharing

Giving Medicare the Ability to Negotiate Drug Prices 

Life saving medications are often far out of reach for many Americans, and their costs have long been a source of despair amongst many.  To combat this, the Inflation Reduction Act law will allow Medicare to negotiate directly with drugmakers to reduce costs of lifesaving treatments. The negotiation process began on September 1, 2023. Medicare announced their top 10 drug targets for negotiation, which includes many of the most popular treatments such as brand name blood thinners, diabetes, and cancer medications. The Congressional Budget Office estimates Medicare negotiation will result in a 50% reduction in net prices for negotiated drugs.

Health care advocate Deborah Scarborough speaks at Protect Our Care tour to tout efforts of lower health costs stops in Kingston, N.Y. Tuesday, August 1, 2023. The event was held a the Academy Green in Kingston. (Tania Barricklo/Daily Freeman)

More To Come

In addition to all of the changes already in process, the Inflation Reduction Act will also bring on future benefits to Medicare including:

• Prescription drug inflation rebates, which will require manufacturers to pay rebates to Medicare if the prices of covered drugs rise faster than the rate of inflation
• 49 million Medicare Part D beneficiaries will have out-of-pocket costs for prescription drugs capped at $2,000 per year starting in 2025

Medicare will negotiate lower prices for 80 of the most expensive and popular prescription drugs by 2030

What’s Next?

As The White House continues to work towards driving down inflation, controlling healthcare related costs will be critical. One year in, the healthcare benefits of the Inflation Reduction Act are just starting to take effect with some immediate benefits to seniors and families. To learn more about what comes next, including further drug price negotiations extended vaccine coverage and benefits to low-income enrollees check out this implementation timeline.