President Joe Biden signed the $750 billion Inflation Reduction Act into law on Tuesday. The act will provide funds for reducing prescription drug costs, fighting climate change, and cutting the federal deficit.
The bill will limit insulin payments to $35 per month for Medicare Part D beneficiaries starting in 2023. The bill will cap all out-of-pocket drug costs to about $4,000 annually in 2024, then cap further costs at $2,000 in 2025. Washington Sen. Patty Murray has long been advocating for a cap on insulin prices.
“The Inflation Reduction Act is going to lower everyday costs for the basics like prescription drugs and health care while building a stronger clean energy economy right here in Washington state, and it’s all paid for by simply ensuring giant corporations pay their fair share in taxes,” Murray said in a statement. “We are finally giving Medicare power to force drug companies to the bargaining table and negotiate lower drug prices for patients across the country and we are extending health care tax credits to make health insurance more affordable. We are helping patients who are rationing their prescriptions to make ends meet or who are afraid to see their doctors, not because they are scared of getting a diagnosis, but because they are scared of the price tag.”
The act also boosts Affordable Care Act (ACA) provisions. The ACA included provisions to help certain Americans with a subsidy for their health insurance costs that were scheduled to end this fall. Those provisions will now be extended for 3 years at a cost of about $64 billion.
“The American Rescue Plan expanded the eligibility of the ACA tax credits so everyone, regardless of household income, is guaranteed to spend no more than 8.5% of annual income on premiums,” Sen. Maria Cantwell said in a statement. “The extension was expected to expire at the end of 2022. Without an extension, 3.1 million people who gained health insurance coverage during the pandemic [would] no longer be able to afford coverage. In Washington state, over 50,000 people gained health coverage during the pandemic because of the ACA tax credit expansion. Without this extension, these people would no longer be able to afford coverage.”
The bill also requires states to cover all vaccines for Medicaid and Children’s Health Insurance Program beneficiaries. The benefit only applies to vaccines that are cleared by the CDC’s Advisory Committee on Immunization Practices, however.
“The Senate has taken the essential step, and Americans are rightfully optimistic,” Gov. Jay Inslee said in a statement. “I thank Sens. Patty Murray and Maria Cantwell for their unflagging, heroic efforts to pass reconciliation legislation through the Senate that meets the scale of our climate crisis, lowers health care costs for Washingtonians, and fights inflation.”