A top official with the Joe Biden administration predicted on Thursday that in the coming year, an additional 543,000 additional people will quality for Obamacare policies, the costs of coverage for the 2 million plus insured on the federal health insurance exchange would remain steady and Medicare beneficiaries with diabetes will pay lower costs.
That comes as a result of the Inflation Reduction Act, argued Department of Health and Human Services (HHS) Secretary Xavier Becerra. Becerra contended in a press availability that the new law delivers on President Biden’s promise to lower health care and continue to improve upon the Affordable Care Act, commonly referred to as Obamacare.
“The IRA is one of the most consequential laws of our lifetime and I say this having been in Congress to help draft and pass the Affordable Care Act and having been the Attorney General defending the law before the Supreme Court,” Becerra said of the new law.
One of the more heralded provisions in the law allows Medicare in 2026 to begin negotiating the top 10 most expensive drugs taken at home and on the market for at least nine years without competition. In 2027, Medicare can negotiate the costs of another 15 drugs and eventually allows the government to annually increase by 20 the number of drugs it can negotiate.
But there are other provisions in the Inflation Reduction Act regarding pharmaceutical costs that kick in sooner.
In 2023, the bill limits co-payments for insulin to a maximum of $35 per month in Medicare Part D, the prescription drug benefit covered by Medicare. About 232,000 Florida Medicare beneficiaries used insulin in 2020, the state specific information released by the Department of Health and Human Services following Becerra’s press availability.
The Inflation Reduction Act also ends co-payments on Part D-covered vaccinations in 2023. About 281,000 Florida Medicare beneficiaries received a Part D-vaccine in 2020.
About 3.6 million Florida residents enrolled with Medicare Part D and in 2024, premium increases for them will be capped at 6% annually.
And in 2025, out-of-pocket drug costs for Medicare Part D will be capped at $2,000. HHS says 113,400 Florida Medicare beneficiaries whose out-of-pocket costs would exceed the $2,000 cap.
According to the federal government, about 2.7 million people enrolled on the federal health insurance exchange would have seen their premiums increase by an average of $590 annually when lower premiums made available in the American Rescue Plan expired at the end of the year.
But the Inflation Reduction Act to ensure the costs of premiums don’t exceed 8.5% of income. The Congressional Budget Office projected it would cost an additional $64 billion to keep the expanded subsidies in place through 2025.
The federal government maintains that the expanded subsidies help Florida small business owners and self-employed individuals the most. According to data from the U.S. Treasury, there are 477,000 small business owners and self-employed adults enrolled in the exchange. They account for 26% of the working age population enrolled in the exchange.
Biden signed the Inflation Reduction Act this week. In addition to lower health care costs the legislation aims to climate change and raising taxes on corporations just weeks before the midterm elections. It passed by a partisan vote, with Democrats in support.
In a statement, AARP Chief Executive Officer Jo Ann Jenkins reacted to the vote:
“Today is a momentous day for older Americans. By passing the Inflation Reduction Act, Congress has made good on decades of promises to lower the price of prescription drugs. Seniors should never have to choose between paying for needed medicine or other necessities like food or rent, and tens of millions of adults in Medicare drug plans will soon have peace of mind knowing their out-of-pocket expenses are limited every year,” Jenkins said.
“Many people said this couldn’t be done, but AARP isn’t afraid of a hard fight. We kept up the pressure, and now, for the first time, Medicare will be able to negotiate with drug companies for lower prices, saving seniors money on their medications. I thank the House members whose votes today will bring real relief to millions of Americans, and I look forward to President Biden signing this bill into law.”
AARP Florida thanked U.S. Reps. Kathy Castor, Sheila Cherfilus-McCormick, Charlie Crist, Val Demings, Ted Deutch, Lois Frankel, Al Lawson, Stephanie Murphy, Darren Soto, Debbie Wasserman Schultz and Frederica Wilson for supporting the legislation.