By Mary Helen Gillespie
Lower health-care costs for American seniors would become closer to reality on Friday if the House, as expected, passes a wide-ranging bill that targets Medicare and other fees which financially burden millions of retirees with chronic medical conditions, including diabetes.
The Inflation Reduction Act of 2022 reflects the Democrats’ long effort to reduce prescription drug costs for the elderly -- including capping the out-of-pocket cost of insulin at $35 per prescription for Medicare patients. The Senate approved the measure 51-50 on Sunday.
The House is expected to approve the Senate bill on Friday with no changes, U.S. Rep. Lloyd Doggett (D-Texas), the chairman of the Health Subcommittee on the House Ways & Means Committee, told Retirement Daily. The subcommittee oversees Medicare and other health-care funding. The act will then go to President Biden, who is expected to quickly sign it into law.
Among insulin users, Medicare Part D enrollees without low-income subsidies spent $572 per person for insulin in 2020, on average, but a small share of insulin users spent considerably more, according to the Kaiser Family Foundation. Plus, Medicare Part D enrollees with higher-than-average out-of-pocket costs could save substantial amounts with the Act’s out-of-pocket spending cap of $2,000 on all prescriptions. And for the first time in its history, Medicare will be able to negotiate some drug prices with pharmaceutical companies with the aim of pushing down costs. It also extends the Affordable Care Act (also known as “Obama Care”) for three more years.
House Republicans opposed to the measure say the act will in fact cause higher drug prices for all Americans in the long run. “In addition to the numerous studies which show drug price controls crush innovation, the Congressional Budget Office has also projected this legislation will lead to higher costs for drugs that have yet to be brought to market,” U.S. Rep. Adrian Smith (R-Nebraska) said in an email.
The act comes three months before the mid-term elections and gives Democrats an especially popular agenda item to take home to their baby boomer constituents, some of whom pay thousands and thousands of dollars annually for prescriptions that help keep them alive.
E.A. Ward, 72, of Pitman, N.J., has heard first-hand horror stories from friends and family who are forced to pay huge out-of-pocket fees that drain their retirement savings for prescriptions not covered in the Part D formulary. She said one friend, now in her 80s, literally could not afford to retire until recently because of the exorbitant price tag of her two insulin prescriptions. She had no choice, Ward said.
“Where do you go? Where do you turn? Some patients need the brand, not the generic version,” she said. “Insulin is a drug needed for life. It’s not optional.”
Ward also said she was glad that the act includes the cost negotiations with Big Pharma for 10 drugs widely used by seniors: “I couldn’t believe Medicare is not allowed to negotiate prices.”
Ward, like many retirees, will opt to bypass Medicare co-pays for herself and her spouse by using private-pay options such as free coupons from Good Rx which dramatically lower many out-of-pocket costs. “I use it all the time,” she said. (So does this reporter who lowered Medicare co-pays totaling $550 for three rosacea medications to $180 via Good Rx, a big bargain but still a big bite. Hence the $148 script is on hold for now.)
The Inflation Reduction Act also targets dramatically increasing spending for climate change efforts, reducing inflation, investing in domestic energy production and manufacturing, revising the tax code and reducing the deficit.
You can read our story summarizing the results of the final vote on Friday, Aug 12, here.