Inflation Reduction Act brings significant healthcare changes after one year.
President Joe Biden’s Inflation Reduction Act: A Game-Changer for Healthcare Affordability
One year ago, President Joe Biden’s Inflation Reduction Act (IRA) was passed, marking a significant milestone in the fight against skyrocketing healthcare costs. This comprehensive legislation, spanning 274 pages, encompasses key provisions that are already reshaping the future of the healthcare industry.
Tackling Rising Healthcare Costs
The IRA addresses four critical areas of concern when it comes to healthcare expenses:
- Medicare drug pricing
- Insulin costs
- Vaccine coverage under Medicaid and the Children’s Health Insurance Program
- Obamacare insurance subsidies
These provisions aim to alleviate the burden on working families and make healthcare more affordable for all.
Public Concern and Voter Influence
New polling data from the Campaign for Sustainable Rx Pricing reveals that 69% of people are worried about prescription drug prices. Additionally, a third of respondents struggled to afford their medications in the past year. Addressing these concerns is not just a policy debate; it is a core value for voters.
According to bipartisan pollsters, the issue of prescription drug prices can significantly impact voter turnout, similar to other pocketbook issues like gas prices and housing costs.
Main Provisions of the IRA
Let’s take a closer look at the key provisions of the IRA that have already begun to shape access to healthcare:
Medicare Drug Pricing
The IRA establishes the Drug Price Negotiation Program, estimated to save Medicare $101.8 billion by 2031. This program requires the secretary of the Department of Health and Human Services to negotiate maximum fair prices for certain brand-name medications without generic competitors under Medicare Part D. The program will eventually expand to include hospital-administered medications under Medicare Part B.
Non-compliant drug manufacturers may face penalties and excise taxes of 65% to 95% of total drug sales revenue. However, some pharmaceutical companies and analysts argue that this program could hinder research and development.
Insulin Costs
The IRA has already made significant strides in reducing insulin costs. Monthly co-pays for insulin under Medicare Part D are now capped at $35, and deductibles have been eliminated under Medicare Part B for certain administration methods. Pharmaceutical companies have also voluntarily lowered insulin prices in response to the IRA.
Vaccine Coverage under Medicaid and CHIP
As of January 2023, Medicare Part D covers all vaccines recommended by the CDC’s Advisory Committee on Immunization Practices, including the shingles vaccine. Additionally, federal funding will equip states to cover recommended vaccines for adults under Medicaid and CHIP, benefiting millions of people.
Obamacare Insurance Subsidies
The IRA extends the Obamacare premium tax credit, providing financial support for households struggling to afford health insurance. Eligibility for subsidies is based on income levels, ensuring that those who spend a significant portion of their income on healthcare receive assistance.
The extension of Obamacare subsidies is the most costly component of the IRA’s healthcare provisions, amounting to nearly $33 billion over 10 years.
With the IRA’s healthcare provisions already making a tangible impact, it is no wonder that Democrats are likely to highlight these achievements in the upcoming 2024 election cycle. The fight for affordable healthcare continues, and the IRA is leading the way.
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