The Inflation Reduction Act of 2022 was signed into law on August 16, 2022. The new law provides meaningful financial relief for millions of people with Medicare by improving access to affordable treatments and strengthening the Medicare Program both now and in the long run. The law makes improvements to Medicare by expanding benefits, lowering drug costs, keeping prescription drug premiums stable, and improving the strength of the Medicare program. The law also extends enhanced financial help to purchase HealthCare.gov and state-based Marketplace plans and expands access to Advisory Committee on Immunization Practices (ACIP) recommended vaccines for adults with Medicaid coverage.
-Ensures that people with Medicare pay no more than $35 for a month’s supply for each covered insulin product under Medicare prescription drug coverage, Traditional Medicare, or Medicare Advantage.
-Lowers Medicare Part D prescription drug costs and redesigns the prescription drug program (e.g., people enrolled in Medicare prescription drug coverage who have very high drug costs will no longer have to pay cost-sharing for their prescription drugs in the catastrophic phase of the program starting in 2024, and caps annual out-of-pocket prescription drug costs at $2,000 for 2025).
-Makes adult vaccines, recommended by the ACIP, available at no cost for people with Medicare prescription drug coverage starting January 1, 2023, and later in 2023 for people with Medicaid coverage.
-Allows Medicare to negotiate directly with participating drug companies to improve access to innovative treatments for people with Medicare and lower costs for the Medicare program.
-Requires drug companies that raise their drug prices faster than the rate of inflation to pay Medicare a rebate and reduces coinsurance for these drugs for people with Medicare under certain circumstances.
-Provides more assistance in affording Medicare prescription drug coverage premiums and out-of-pocket drug costs by expanding the low-income subsidy program (LIS or “Extra Help”) under Medicare Part D to 150% of the federal poverty level starting in 2024.
-Extends increased financial help to purchase affordable, comprehensive health insurance plans through HealthCare.gov and the state-based Marketplaces.
This law means millions of Americans across all 50 states, U.S. territories, and the District of Columbia will save money from meaningful benefits. The Inflation Reduction Act is accomplishing the following just one year after being enacted:
-Saving Affordable Care Act Marketplace consumers an average of more than $800 per year from continued expansion of financial assistance, based on national estimates.
-Driving the nation’s uninsured rate to historic lows.
-Lowering insulin costs for 4 million seniors and other Medicare beneficiaries with diabetes by capping a month’s supply of each covered insulin at $35.
-Providing ACIP-recommended adult vaccines at no cost to millions of people with Medicare.
-Lowering out-of-pocket costs for some people with Medicare for certain Part B drugs and biologicals with prices that have increased faster than the rate of inflation.
-Projecting savings for nearly 19 million seniors of an average of $400 per year when the $2,000 cap on out-of-pocket prescription drug costs goes into effect in 2025.