As we all know, a few weeks ago The Inflation Reduction Act of 2022 was passed by Congress and signed by President Biden. Here are some positive things as they relate to Medicare:
- Beginning in 2023, insulin will be capped at $35. Currently this is a voluntary program
- In 2024, there will be a cap, or stop loss, on medicine expenditures once recipients get through the coverage gap, but it won't be of much help unless people really spend a lot of money on meds. Currently there is no cap at all.
- In 2024, that stop loss goes to a specific $2000. It will probably be adjusted annually thereafter.
- Beginning in 2026, Medicare will have the authority to negotiate the prices of 10 medications. This is unprecedented, and we'll see what kind of effect it will have long term. It will increase to 20 medications by 2029.
The actual effect on these changes may or may not have the intended effect. Here are a couple of quick thoughts, or concerns:
- Once the hard cap of $2000 is enacted, who is paying the bill? Will this shift costs to other areas, such as higher medical premiums, deductibles, copays, or other benefits?
- What has not been defined is which insulins will be included under the new rule. Currently, there is a list of approved insulins with companies that participate in the current insulin savings program.
- Currently, patients work with doctors to keep the cost of medicines as low as possible, often switching to generic meds or alternative name brand drugs. Will the new cap of $2000 take away the incentive to be cost conscious?
- If the pharmaceutical companies are sharing much of the costs, will it limit research and innovation and stunt the introduction of new meds?
Of course we are hopeful that these changes will bring about the desired results. The Affordable Care Act, for example, solved some legitimate problems, but created a whole new set of issues that have yet to be addressed. Let's keep a positive outlook on The IRA and hope that our Medicare clients will get some relief with the cost of their medications.