President signs Inflation Reduction Act with health care provisions

President Joe Biden signed into law the Inflation Reduction Act (IRA) with health insurance subsidies, future negotiations for Medicare drug prices and caps on insulin costs for Medicare beneficiaries.

With reforms coming for health care, climate change and taxes, Biden called it one of the most significant laws in American history, by which “the American people won and the special interests lost.” He spoke during a White House signing ceremony broadcast over whitehouse.gov, flanked by Senate Majority Leader Chuck Schumer, D-New York, and Rep. James E. Clyburn, D-South Carolina, the House majority whip.

Physicians groups and health care analysts generally have praised the legislation for its effects on health insurance and drug prices for Medicare. The president recounted several provisions that already have made news:

• Medicare prescription drug costs will be capped at an estimated $4,000 a year in 2024 and $2,000 a year starting in 2025.
• An estimated 13 million people will continue to save on health insurance costs via premium subsidies for insurance purchased through the Affordable Care Act Marketplace.
• Medicare beneficiaries with diabetes will have insulin costs capped at $35 a month.

Physicians respond

The American College of Physicians (ACP) was glad to see that the IRA was passed by the House and would be signed into law. The legislation includes many policies that ACP has long advocated for and will help millions of Americans better access necessary health care services and treatments, said an ACP statement published Aug. 15, the day before the president was scheduled to sign the bill.

“ACP strongly supports the provision that will extend the increased subsidies for health insurance plans purchased on the Affordable Care Act health insurance exchanges, as these increases have led to record numbers of Americans gaining access to health insurance,” college President Ryan D. Mire, MD, FACP, said in the statement.

“We also support the provisions that will help Medicare beneficiaries to better afford needed medications,” Mire said. “Allowing Medicare to negotiate with pharmaceutical manufacturers for lower drug prices and capping the cost of insulin for beneficiaries are both necessary steps that ACP has long supported as tactics to tackle the rising cost of prescription drugs. Finally, the changes to fund clean energy projects and reduce carbon pollution are essential steps in starting to mitigate climate change and ensure our planet continues to be healthy enough to support healthy humans.”

Analysts react

The IRA is “an important milestone in the fight to ensure access to quality, affordable healthcare,” said Avenel Joseph, PhD, MS, vice president for policy at the Robert Wood Johnson Foundation.

“This is an enormous accomplishment toward developing policies that will improve people’s lives,” Joseph said in a published statement. “Keeping healthcare affordable will make care more accessible at a time when people need relief. However, this is only a first step in the right direction. As a country, we must do more to create an equitable nation where everyone – no matter who they are, where they live, or how much they make – has an opportunity to live their healthiest life.”

Joseph called for legislative action to provide insurance coverage to almost 4 million uninsured adults, including at least 2.4 million people of color, 500,000 people with disabilities and almost 1 million older Americans. They are not eligible for insurance coverage through Medicaid because of the states they live in, according to the foundation.

Congress should renew the expanded Child Tax Credit, create national standards for family and medical leave, and create affordable and stable housing, Joseph said. He and RWJF President published a commentary in The Hill about what the IRA could have been.

A milestone

Leaders of the Commonwealth Fund also used the word “milestone” to describe the effects of making health care more accessible and affordable for people. The bill provides ACA insurance premium subsidies and lowers prescription drug prices and out-of-pocket costs for Medicare beneficiaries, said Lovisa Gustafsson, fund vice president for controlling health care costs, and Sara R. Collins, senior scholar and vice president of health care coverage and access, and tracking health system performance.

“This historic bill greatly reduces the cost of health care for millions of Americans who buy coverage on their own and for many Medicare beneficiaries,” they said in a summary published Aug. 15. “It will enable people to get and keep affordable coverage in the ACA marketplaces, where the cost of premiums is the most oft-cited reason people don’t enroll or drop coverage. The progress on prescription drugs is a milestone achievement toward making prescription drugs more affordable for Medicare patients and could pave the way for future reforms.

By the numbers

On Aug. 15, the White House published an IRA summary “By The Numbers,” with various facts and figures relating to health care and other parts of the bill.

The section “Defeating Special Interests,”stated:

$187 million: The amount the pharmaceutical industry spent on lobbying in 2022

• 1,600: number of pharmaceutical company lobbyists in 2021, which was three times the number of members of Congress
• 33 years: length of time congressional Democrats were trying to lower prescription drug costs by allowing Medicare to negotiate prices
• 19 years: length of time Medicare has been blocked from negotiating prescription drug costs

This article originally appeared on Medical Economics®.