What You Need to Know About the Inflation Reduction Act
Signed into law in August 2022, the Inflation Reduction Act (IRA) includes provisions to lower health care and medication costs over the next several years. Below are a few key implications of which providers should be aware. The IRA:
- Allows Medicare to negotiate lower prescription drug prices with pharmaceutical manufacturers. Maximum fair prices go into effect starting in 2026.
- Extends enhanced subsidies to purchase HealthCare.gov and state-based marketplace health plans through 2025
- Implements a yearly cap ($2,000 in 2025) on out-of-pocket prescription drug costs for Medicare beneficiaries
- Gives Medicare recipients with a prescription drug plan access insulin for no more than $35 per insulin per month
- Implements $0 cost sharing for adult vaccines recommended by the Advisory Committee on Immunization Practices (ACIP), available January 1, 2023 for Medicare Part D recipients, and October 1, 2023 for most adults with Medicaid or CHIP)
Also of note, starting in 2024, people enrolled in Medicare prescription drug coverage who have higher drug costs so that they reach the catastrophic phase of Medicare drug coverage will no longer have to pay cost-sharing toward their prescription drugs in the catastrophic phase.
In the first episode of miniVHAN’s pharmacy series, Stacie Dusetzina, PhD, Professor of Health Policy and Ingram Professor of Cancer Research at VUMC, says she hopes that the IRA will improve access to medications and improve adherence in many patients.
“I’m excited about improved access for Medicare beneficiaries who have struggled to fill their prescriptions or made huge compromises to their quality of life, such as the ability to pay for rent or food. Moving forward I think VHAN providers could see their patients being able to take prescriptions as directed and adhere to those treatments. I am excited to see better access for patients in the future.”
Listen to the full miniVHAN episode here or check out this IRA overview from the Centers for Medicare and Medicaid Services to learn more. The Kaiser Family Foundation offers helpful timeline of when policy changes will take effect here.