On Tuesday, August 16, 2022, President Biden signed into law the Inflation Reduction Act (IRA) of 2022, which includes expansive health and climate provisions. This bill is the culmination of over a year of debate about a wide range of proposals, including an extensive expansion of Medicare benefits. While the final bill includes only prescription drug provisions relating to Medicare, these provisions by themselves are a historic step forward concerning the price of prescription drugs and will be of significant benefit to Medicare beneficiaries.
Among other things, the IRA will:
- Allow Medicare to negotiate with drug manufacturers for the price of some Part D and Part B drugs (starting in 2026);
- Cap beneficiary out-of-pocket Part D drugs costs at $2,000 per year (starting in 2025; in 2024, the 5% coinsurance for Part D catastrophic coverage will be eliminated);
- Impose checks on the annual rise in costs of drugs and Part D premiums (limitations on drug prices start in 2023, and limitations on Part D premiums start in 2024);
- Limit monthly out-of-pocket copays for insulin to $35 (starting in 2023); and
- Expand access to the Part D low-income subsidy (“Extra Help”) (starting in 2024).
For a more detailed analysis, see this Kaiser Family Foundation report titled “What Are the Prescription Drug Provisions in the Inflation Reduction Act?” (Aug. 11, 2022) and this article in Health Affairs Forefront titled “Understanding The Democrats’ Drug Pricing Package” by Rachel Sachs (Aug. 10, 2022).
The Center for Medicare Advocacy applauds Congress and President Biden for taking these considerable steps in improving prescription drug coverage for Medicare beneficiaries.
The following implementation timeline of the prescription drug related provisions of the IRA is reproduced from materials from the Kaiser Family Foundation (found at the above link):
August 18, 2022 – D. Lipschutz