Inflation Reduction Act - Lowering Healthcare Costs

The Inflation Reduction Act is delivering on its promise to lower healthcare costs for seniors and American families. After decades of trying to lower prescription drug costs, this historic law forces Big Pharma to negotiate the cost of prescription drugs and caps the cost of insulin at $35 for Medicare beneficiaries. In addition, the law expands healthcare coverage to over 361,000 Californians, while slashing health premiums. The Inflation Reduction Act is delivering on its promise to lower healthcare costs for Americans and ensure they get the peace of mind that quality, affordable health insurance brings to their lives. 

Expanding Healthcare Coverage to Americans

The Inflation Reduction Act will make health coverage more affordable for millions of Americans by extending key Affordable Care Act (ACA) tax credits through 2025. Beneficiaries will pay an average annual premium of $592. Without the Inflation Reduction Act, the average premium for these individuals would have increased by 151%, to $1,487, in 2023.

Thanks to the Inflation Reduction Act, the average enrollee is expected to save $895 in premiums starting next year.

• Families: A family in the district with two adults, two children, and a household income of $75,000 could save $2,832 on their premiums next year.

• Single Parents: A single-parent household with one adult, one child, and a household income of $30,000 could save $1,260 on their premiums next year.

• Seniors: A household of two adults over the age of 60 with a joint income of $70,000 could save $13,908 on their premiums next year.

Lower Prescription Drug Costs

Americans pay two to three times what citizens of other countries pay for prescription drugs. For some drugs, U.S. prices are even higher than that. For the first time in history, the Inflation Reduction Act authorizes Medicare to negotiate the prices of high-cost prescription drugs starting in 2023.

Under the Inflation Reduction Act, Medicare beneficiaries will pay lower coinsurance for some Part B drugs if the drug’s price increases faster than the rate of inflation. This coinsurance adjustment applies to 43 prescription drugs under Medicare Part B. Beneficiaries who take Part B drugs may save between $1 and $149 per average dose starting July 1, 2023, depending on their individual coverage.

The law also requires drug manufacturers to pay a rebate to Medicare if they increase their prices faster than the rate of inflation.

Resources:

• Part B Inflation Rebate Guidance: 340B Modifier

• Medicare Part B Inflation Rebate Program Initial Guidance

• FACT SHEET: Part B Rebatable Drug Coinsurance Reduction 

• Reduced Coinsurance for Certain Part B Rebatable Drugs (April 1 - June 30, 2023)

• Reduced Coinsurance for Certain Part B Rebatable Drugs (July 1 - September 30, 2023) 

Capping the Cost of Insulin at $35 per month

Beginning in July 2023, monthly copayments for insulin products will be capped at $35 per month for seniors and individuals with disabilities on Medicare, benefitting up to 1.7 million people who use insulin. 

Resources:

• Learn more about insulin costs under Part D and Part B.

• FACT SHEET: Frequently Asked Questions about the Insulin Provision

For more information, call 1-800-MEDICARE (800-633-4227) or visit www.medicare.gov.