The summer of 2022 saw extremely high inflation rates nationwide, spiking to 9.1% in June. While inflation causes all prices to go up, the healthcare industry was hit particularly hard. As a result, prescription drug costs soared, and many necessary medications became out of reach. To help combat rising prices, President Biden signed the Inflation Reduction Act in August of 2022. Signing this act made it possible for many families to afford their medication by lowering the cost of prescription drugs and making health insurance more attainable.
While some of the benefits of this act are not set to take place for a few years, a few benefits are set to take effect in 2023, including:
• Limit Cost Sharing for Insulin for Medicare users
◦ Starting January 1, 2023, the out-of-pocket price for Insulin prescribed to Medicare Part D enrollees is capped at $35 monthly. Of the almost 64 million Medicare enrollees, around 49 million are Part D enrollees, and of those 49 million, 3.3 million are dependent on Insulin. So, this benefit is set to drastically reduce the out-of-pocket cost of Insulin for customers across the country. To put this in perspective, if this same act had been signed in 2020, Part D users would have saved almost $734 million by the start of 2023. This portion of the Inflation Reduction Act will also expand to include Part B enrollees on July 1, 2023.
• Drug Companies may be required to pay rebates to Medicare.
◦ With the market constantly fluctuating, the price of medicine can’t remain the same. As such, the Inflation Reduction Act has included a provision requiring drug manufacturers to pay a rebate to the government if the price of drugs under Part B and most under Part D exceeds the inflation rate. Any money raised through the rebate program will be deposited into a Supplementary Medical Insurance Fund. This portion of the act will limit unnecessary out-of-pocket spending brought on by increased drug prices and benefit Medicare beneficiaries.
• Eliminates Cost Sharing for Some Adult Vaccines
◦ The Advisory Committee on Immunization Practices (ACIP) is responsible for recommending how to use vaccines to control diseases within the US. While Part B fully covers the cost of vaccines for Influenza, Pneumococcal Pneumonia, Hepatitis B, and Covid-19, Part D of Medicare only covers commercially available vaccines. This leaves Patients with Part D to cover 20% of the cost of the vaccine. To help regulate this and prevent patients from paying for essential and necessary vaccines, the Inflation Reduction Act requires vaccines recommended by the ACIP under Part D to be covered at no cost to the patient.
While these are just a few benefits that affect the healthcare industry, the Inflation Reduction Act is a landmark legislation that provides a significant curb to rising inflation.