The huge health, climate and tax bill expected to pass the House on Friday and send to the president for signature won’t be as sweeping as the Democrats who drafted it, but it will help millions of Americans Better afford their prescription drugs and health insurance.
The Reducing Inflation Act is estimated to spend approximately $485 billion over approximately 10 years on health and alternative energy programs, both through taxes and savings Raised about $790 billion. The difference will be used to help reduce the deficit.
On the health front, the legislation achieves two key goals for congressional Democrats. First, it would enable the federal government to negotiate the price of some drugs purchased by Medicare beneficiaries, a tool that has long been opposed by the pharmaceutical industry. Second, it will expand enhanced premium subsidies for people who buy insurance in the Affordable Care Act marketplace Congress enacted last year to help deal with the covid-19 pandemic.
“This is historic. We’ve never been able to negotiate prescription drug prices before. This is something we’ve been fighting for for decades things,” House Speaker Nancy Pelosi said this week. “Of course I want more – we always want more. But it’s a big deal.”
Act extends the enhanced subsidy that will expire this year, increases subsidy for those already eligible for aid through the 2025. 2021 COVID-19 Relief Act, and provides some middle-income earners who find insurance costs too high subsidy. According to KFF’s analysis, if the subsidy is not continued to strengthen, the premiums of about 13 million people will rise by more than half on average. Those earning more than four times the poverty line will no longer be eligible for the subsidy, in addition to seeing their premiums skyrocket.
The extension of the subsidy is expected to cost approximately $64 billion.
The bill would also have major implications for Medicare, including allowing price negotiation plans for some of the most expensive drugs, limiting beneficiaries out-of-pocket expenses, limiting their share of the cost of insulin to $35 a month and prohibiting drug companies from raising prices faster than inflation.
Drug pricing rules expected to save the government nearly $100 billion over 10 years will require the US Department of Health and Human Services to determine Medicare’s 100 Expensive drugs, then choose 10 for price negotiation starting in 2023. These prices will take effect in 2026. An additional 10 drugs will be added over the next two years and will be fully effective by 2028.
Negotiations will first apply to medicines people get at the pharmacy, but for the next two years, medicines people get at the doctor’s office Drugs
Some changes to Medicare will be implemented next year. One is the price increase ceiling. Under the bill, companies that raise the price of drugs sold to Medicare at a faster-than-inflation rate must return rebates to Medicare, saving the government an estimated $101 billion. Inflation protection will also apply to certain medicines, such as biologics, that patients get in a doctor’s office. New vaccine and insulin cost caps will also come into effect in 2023. Under the bill, all vaccines recommended by the Federal Advisory Committee on Immunization Practices will be fully covered by Medicare, Medicaid and Children’s Health Insurance plans. For Medicare beneficiaries who need insulin, out-of-pocket costs are capped at $35, starting in 2026, and at $35, or 25% of the negotiated price if it’s less than the negotiated price.
Another big savings for Americans enrolled in Medicare is a cap of $2,000 in out-of-pocket drug costs starting in 2025 Dollar. According to KFF, 1.5 million Medicare beneficiaries paid more than $2,000 for their drugs in 2019. About 3.5 million beneficiaries could save more than $1,500 a year, according to an analysis by the Committee on Informed Drug Expenditure Analysis based on 2012 data.
Beginning in 2024, those with out-of-pocket costs reaching the “catastrophic” threshold of $7,050 will not have to pay anything for the drug that year Additional costs. There is currently no cap, and once the threshold is reached, people must pay 5% of the cost of extremely expensive drugs.
Also begins By 2024, Medicare will pay approximately 500,000 people with incomes between 135% and 150% of the poverty line A low-income subsidy ($18,347 to $20,385 per person) is provided to beneficiaries in between. Drug plan premium increases for all beneficiaries will also be limited to 6% in 2024 through 2029. people, but attempts by Democrats to slow drug price hikes and limit insulin copays outside of Medicare have been blocked. Because the bill is passed through a fast-track process called budget reconciliation, all provisions must have a direct impact on federal spending or revenue . Senate lawmakers reviewing such measures ruled that insulin and inflation measures targeting the private insurance market were out of scope. Democrats have tried to increase a broader cap on insulin costs, but trailed by three votes out of 60 needed to do so, with only seven Republicans joining.
Senate Majority Leader Chuck Schumer has promised another vote in the fall on expanding the insulin cost cap.
Still, some analysts see reason to believe that most Americans not directly affected by the bill will see some benefit, Especially from restrictions on drug price hikes and Medicare drug price negotiations.
In a conference call with reporters on Thursday, Sean Dickson of the nonprofit West Health Policy Center pointed to the government’s 340B plan, It requires pharmaceutical companies to offer discounts to certain care providers, with an inflation penalty. He estimates that Medicare alone saves $7 billion in indirect savings over five years because of these inflation constraints.
“This subsection has spillover effects from government programs with an inflation penalty,” Dixon said. “This has resulted in lower costs for everyone using these drugs and slower price growth.”