WASHINGTON, DC – In 2022, Congress passed the Inflation Reduction Act (IRA), that includes lowering the cost of prescription drugs and healthcare. Large businesses will pay a 15% corporate minimum tax to defray this cost. The bill narrowly passed the Senate, 51 to 50, with all 50 Democrats voting for the bill and all 50 Republicans voting against it. Vice President Harris cast the tie-breaking vote. President Biden signed the bill. After the Senate first ratified the bill on August 7th, Biden told reporters, “When you sit down at that kitchen table at the end of the month, you’re going to be able to pay a whole hell of a lot more bills because you’re paying less in medical bills.”
America is the only developed nation in the world where a citizen can become financially strapped because of the high cost of health care. Oftentimes, hard-working Americans have to potentially compromise their health by spending their limited resources on food and shelter instead of prescription medicine.
Here are some of the health provisions of the IRA:
- Medicare negotiated the prices of 10 commonly prescribed costly drugs with pharmaceutical companies last year. The new prices will take effect in 2026. It is estimated that millions of seniors, people with disabilities, and other Medicare beneficiaries will save over $1.5 billion of out-of-pocket expenses in 2026. Taxpayers should save $6 billion. The cost negotiation will be expanded to more drugs in succeeding years.
- Out-of-pocket insulin costs have been capped at $35 a month, benefiting 4 million Medicare beneficiaries.
- Out-of-pocket costs for prescription medicines covered by Medicare will be capped at $2,000 for Medicare beneficiaries annually beginning on January 1st this year. The AARP estimates that more than 3 million seniors will save money in 2025 and that almost one-half million people will each save more than $3 thousand. Patients taking high-cost cancer drugs should save a lot of money. The price cap will apply to prescription drugs under Medicare Part D. The cap was $3250 in 2024, its first year.
- Drug companies will offer rebates to Medicare and lower out-of-pocket costs to seniors if prescription prices outpace inflation.
- There is a three-year extension on the Marketplace subsidies that will benefit millions of Americans. More than 80% of people in the marketplace had a health insurance plan that cost only $10 or less each month. The number of people with ACA coverage almost doubled between 2021 and 2024 to a record-breaking 21 million Americans.
Listen to the full report below:
Contact: Dick Needleman, Health reporter, 103.3 AshevilleFM, [email protected]
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