The Inflation Reduction Act was signed into law by President Biden on August 16, 2022. The primary function of the law is to combat inflation and reduce carbon emissions; however, the law contains reforms that will affect health coverage.
Most of the health reforms in the Inflation Reduction Act impact those with Medicare coverage, aiming to cut Medicare drug costs by approximately $287 billion over the course of 10 years. The following reforms will be implemented:
- Drug price negotiation. The Secretary of Health and Human Services will be allowed to negotiate costs for specified Medicare drugs annually. Starting in 2026, 10 Medicare Part D drugs will be eligible for negotiation, increasing to 15 by 2027. In 2028, 15 drugs Medicare Part B & D drugs will be eligible for negotiation, increasing to 20 in 2029.
- Insulin cost cap. Insulin costs will be capped at $35 per month in 2023 for those enrolled in Medicare who have diabetes.
- Vaccine cost-sharing. The law also eliminates cost-sharing for adult vaccines under Medicare Part D. Prior to this law, coverage for adults was optional, and about half of states provided vaccine coverage, some with cost-sharing.
- Out-of-pocket prescription cost cap. Effective in 2025, out-of-pocket prescription drug costs will be capped annually at $2,000 for Medicare beneficiaries. Eligible individuals who reach the cap will have no cost-sharing requirement.
If you are enrolled in Medicare or are Medicare eligible and have questions about how the health reforms will affect you, please contact your dedicated Creative Benefits, Inc. team member.