What does Biden’s Inflation Reduction Act mean for insurance, medical costs

The Inflation Reduction Act, which President Joe Biden signed into law this week, is expected to keep 44,000 citizens uninsured in 2023.

The act will also reduce the cost of prescription drugs and insulin for some Medicare users, lower health insurance premiums, and provide financial assistance to some beneficiaries below the poverty line, according to a report released by the White House on Thursday.

“I think we’re going to have good cooperation from all parts of the healthcare system, whether it’s drug manufacturers, insurers, providers, to make this happen, because at the end of the day, we all want the same thing,” US Health and Human Services Secretary Xavier Becerra said in a call Thursday. . “We want to make sure Americans are healthy and have access to quality care to keep them healthy.”

Health insurance tax credits were introduced by the Affordable Care Act, and strengthened by the American Rescue Plan in 2021. This act will expand the tax credits, instead of allowing them to expire.

The HHS report shows that 44,000 Alabamians will lose public health insurance entirely and 24,000 will lose subsidies, if the tax cuts end. The Inflation Reduction Act extends the tax credits until 2025.

Alabamians using a Part D drug Planning through Medicare will see “financial security increase” in 2024, according to a report by the US Health and Human Services. In 2025, a $2,000 cap on out-of-pocket drug costs will go into effect. HHS wrote that of the 784,000 Alabamians who are beneficiaries of Plan D, 22,000 pay more than $2,000 a cup of medicine.

In addition, Medicare will be able to negotiate more expensive drug prices. HHS cited Kaiser Family Foundation estimates that between 5 and 7 million Americans use prescription drugs.

The HHS report states that Americans pay 2-3 times what citizens of other countries pay for prescription drugs. In the 2021 NiceRx Drug ReportAlabama ranked 7th in the US for the highest annual drug use.

Dr. Meena Seshamani, deputy director of the Centers for Medicare and Medicaid Services and director of the Center for Medicare said that she often takes care of people who face high drug costs as a doctor.

“All these figures represent real people with real lives and real problems that they are facing. And as a doctor, I took care of these people in my practice, and every day I see the difficulties that people face in order to pay for the medicine that they need to be healthy. ,” said Seshamani.

He recalled the difficulties faced by some patients, saying that some “choose between the food on the table and the choice between medicine,” or leave the disease to continue because they could not afford medicine.

The most anticipated part of the Inflation Reduction Act is the increase in insulin at $35 a month. A report from GoodRx showed that average insulin prices increased by 54% nationally from 2014-2019.

According to Centers for Disease Control and Prevention, Alabama 12.7% of adults in Alabama were diagnosed with diabetes, compared to the national average of 9.8%. HHS estimates that 63,000 Alabamians on Medicare used insulin in 2020. The new cost will go into effect in 2023.

The act also provides for “Extra Assistance,” or an increase in low-income assistance under Part D, beginning in 2024 for Medicare beneficiaries with incomes up to 150% of the poverty level. Currently, between 135-150% of beneficiaries receive only a small subsidy.

Those who are eligible may not pay the Part D premiums, as well as lower premiums. HHS reported that 12,000 Alabamians received small grants in 2020 and could benefit from the expansion.

Data from the US Census American Community Survey say 15.5% of Alabamians people of all ages live below the poverty line in 2019. Among people 65 and older, the survey estimates 10.5% live below the poverty line.

In 2021, the US Census Bureau reported that the poverty line for a family of one person over the age of 65 was $12,996 and $16,379 for two adults over the age of 65.

The HHS report said the act would continue to lower premiums by about $750 a year for about 219,000 state residents. It would also require drug companies to pay Medicare if they raise drug prices faster than inflation, which HHS wrote would “reduce out-of-pocket costs for Medicare beneficiaries, beginning in 2023.”

Health care reform is only a small part of the 730-page bill, which also covers issues such as climate change and taxes. Some Alabama Republicans voiced opposition to the Democrat-led bill and criticized Biden’s administration after the president signed it into law on Tuesday.

Kaiser Family Foundation they stamped the time detailing when any changes to health care from the Inflation Reduction Act will take place until 2029.