HR 5376: The Inflation Reduction Act is Signed Into Law

HR 5376: THE INFLATION REDUCTION ACT

On Friday, August 12^th, the House of Representatives passed the Inflation Reduction Act. The Senate passed the legislation the previous Sunday. This piece of legislation was negotiated down from the original Build Back Better legislative initiatives. The overall bill deals with tax policy and addresses climate change. However, the bill makes significant changes to Medicare Part D that will help reduce out-of-pocket costs for the patients the Alpha-1 Foundation serves. Those provisions include:

1. Reduction in Catastrophic Cap: The annual prescription drug out-of-pocket cost sharing could be no higher than $2000. Beneficiaries would also have the option to break that amount into more affordable monthly payments. This provision begins in 2025.
2. Low Include Subsidy Changes: Beginning in the plan year 2024, the Medicare Part D Low Income Subsidy threshold will increase for beneficiaries with incomes between 135% and 150% of the federal poverty level. This will further reduce out-of-pocket costs. Under the IRA, patients on LIS will pay no premiums; will have no deductible; and will have fixed lower copayments.
3. Insulin: The IRA will cap monthly out-of-pocket cost sharing for insulin at $35. This begins in the 2023 plan year.
4. Vaccines: Beginning in 2023, Zero vaccine cost-sharing: All vaccines would be free for Medicare beneficiaries, the currently only population for which vaccines are not already free.
5. Premium Increases: The IRA limits annual premium growth for Medicare part D premium increases at no more than 6% for plan years 2024-2029.
6. Medicare Drug Negotiation: Beginning in 2026, Medicare will begin to negotiate drug prices. Starting with 10 Part drugs, the Secretary of Health and Human Services would have new authority to negotiate prices. The drugs eligible for negotiation would be taken from a list of the 50 most expensive brand-name drugs that lack competition and would remain on the list until competition enters the market. In 2027, the price negotiation increases to 15 Medicare Part D drugs. In 2028, HHS will enter into price negotiation for 15 Medicare Part B and Part D drugs, expanding into Medicare Part B. In 2029, the price negotiation will expand to 20 Medicate Part B and Part D drugs.
7. ACA Subsidies: Finally, the bill would extend ACA Marketplaces premium subsidies, which were due to expire at the end of 2022, for an additional three years.

Link here for full bill details: https://www.congress.gov/bill/117th-congress/house-bill/5376