As of August 16, 2022, a new healthcare cost law went into effect in the United States aimed at reducing healthcare costs for millions of Americans. This new law called the Inflation Reduction Act, is expected to save Americans billions of dollars in health care costs each year.

Here are six things you need to know about this new law:

1)   Medicare Prescription Drug Prices Reduced Through Manufacturer Price Negotiations

A significant benefit of the Inflation Reduction Act is that it will lower prescription drug prices in Medicare through price negotiations with manufacturers. Under the law, Medicare negotiates drug prices directly with manufacturers, ensuring low cost prescription drugs for people with Medicare. As a result, people with Medicare will be able to purchase prescription drugs at lower prices due to increased competition.

2)  The Inflation Reduction Act will reduce the out-of-pocket costs of prescription drugs for Medicare beneficiaries.

Under the new law, Medicare beneficiaries will pay less for their prescription drugs. Specifically, the law will cap out-of-pocket costs for insulin at $35 per month. This will provide significant relief to the millions of Americans who rely on Medicare for their health care.

3)  Caps on Out-of-Pocket Prescription Drug Costs in Medicare

The Inflation Reduction Act also includes a yearly cap on out-of-pocket prescription drug costs in Medicare. The Medicare prescription drug coverage cap will rise to $2,000 in 2025 for people with Medicare prescription drug coverage. This will help to make health care more affordable for seniors and others who rely on Medicare for their health care.

4)  Lower Health Insurance Premiums through HealthCare.gov and State-Based Marketplaces

The new law also provides continued lower health insurance premiums through HealthCare.gov and state-based marketplaces. The law extends enhanced financial help to purchase HealthCare.gov and state-based Marketplace plans, first made available under the American Rescue Plan. In 2021, consumers in these plans saved an average of $800 on their premiums due to the American Rescue Plan. The Inflation Reduction Act ensures that this financial help will persist through December 31, 2025, preventing the discontinuation of much-needed relief for millions of Americans who have struggled with the cost of health insurance.

5)  Expanded Medicare Benefits and Lowered Out-of-Pocket Costs for Prescription Drugs

The Inflation Reduction Act makes Medicare stronger for current and future enrollees. It expands Medicare benefits by making program improvements that save money, making healthcare more accessible and affordable without costing taxpayers extra. The law also decreases government reinsurance in the catastrophic phase of Part D from 80% to 20% for most brand-name drugs, biologicals, and biosimilars. It will reduce from 80% to 40% for generics beginning in 2025. Most importantly, the law will cap insulin cost-sharing to benefit at least 1.4 million people with Medicare.

6)  Improved Coverage and Lower Out-of-Pocket Costs for Recommended Vaccines

The Inflation Reduction Act also improves coverage and lowers out-of-pocket costs of recommended vaccines in Medicare, Medicaid, and the Children’s Health Insurance Program. Most adults enrolled in Medicaid or the Children’s Health Insurance Program will be guaranteed coverage of ACIP-recommended vaccines at no cost beginning October 1, 2023. People with Medicare drug coverage will also pay nothing out-of-pocket for adult vaccines recommended by the Advisory Committee on Immunization Practices (ACIP), including the shingles and Tetanus-Diphtheria-Whooping Cough vaccines, starting in 2023.

Conclusion

The Inflation Reduction Act is a monumental achievement in the fight to reduce healthcare costs. The legislation is designed to help Americans in various ways, from lowering prescription drug prices in Medicare to capping out-of-pocket prescription drug costs and health insurance premiums. Furthermore, the Act has also expanded Medicare benefits.

By taking these steps, the Inflation Reduction Act will help Americans of all income levels access the care they need without worrying about the cost. The Act is an important step forward in providing Americans access to high-quality, affordable health care. To learn more about the Inflation Reduction Act and its impact on healthcare costs, visit the official government website. See New Law