Inflation Reduction Act marks major changes to Medicare
INDIANAPOLIS (WISH) — President Joe Biden on Tuesday signed the Inflation Reduction Act of 2022, a piece of sweeping legislation aimed at reducing the deficit, investing in domestic energy production, and lowering prescription drug prices.
The new law will have a big impact on the millions of Americans who rely on Medicare for insulin and prescription drugs, according to Bill Sweeney, senior vice president of government affairs for AARP.
Seniors with diabetes will benefit from a new $35 monthly cap on insulin prices, Sweeney says.
“There are about 3.3 million seniors in this country who take insulin to control their diabetes, and the prices have been all over the map. Some people are paying $35 a month, some people are paying $100 a month, and sometimes, people are paying more. Under this bill that just passed, no one who’s on Medicare will pay more than $35 a month for their insulin.”
The new law also requires Medicare to cap annual out-of-pocket prescription drug costs for seniors — including about 1 million Hoosiers — who are enrolled in Medicare Part D.
“When this cap comes into effect, they won’t pay more than $2,000 a year,” Sweeney said. “What that means is, you get peace of mind that, if you get a diagnosis from a doctor of cancer where the drugs could cost $10,000 or $15,000 a year, you won’t have to go bankrupt to get the treatment you need.”
In addition to putting a cap on out-of-pocket prescription costs, Medicare will also be required to negotiate the price of certain prescription drugs.
“This is going to be a tremendous change,” Sweeney said. “Finally letting Medicare negotiate using its buying power to negotiate for lower prices — just like Sam’s Club or Costco could do. For years, we’ve made the federal government just pay whatever price the drug companies charge for these medicines. So, finally, we’ll be able to negotiate and start seeing some of those prices come down.”
Seniors will see some changes sooner than others, according to Sweeney.
“Starting in January next year…free vaccines under Medicare. And the negotiation process is going to start at the end of next year around the first set of drugs that will be covered by the bill, and that will take a few years to go into effect,” Sweeney said.