WEDNESDAY, Aug. 17, 2022 (HealthDay News) — President Joe Biden signed into law the Cut Inflation Act on Tuesday, making it the most significant health care legislation signed into law in more than a decade.
How will this affect health care?
Millions of Americans covered by Medicare will see significant reductions in health care and prescription drug costs. And those covered by the latest major health care legislation, the Affordable Care Act (ACA), will also benefit from financial savings.
For those on Medicare, the many improvements include a cap that limits drug costs to $2,000 per year, the government’s new ability to negotiate certain prescription drug prices, and limits on the monthly cost of insulin. .
For the roughly 13 million people who have insurance under the ACA, the new law extends subsidies through 2025.
Stacie Dusetzina, professor of health policy at Vanderbilt University Medical Center, said BNC News that the changes are “significant”, especially for people who need expensive drugs.
Where the US government was previously prohibited from negotiating prices with drugmakers, it will now be able to do so for Medicare patients, in a process that will span several years. Under the new plan, the U.S. Secretary of Health and Human Services will proposethe government’s price offer for some drugs, said Tricia Neuman, senior vice president of the Kaiser Family Foundation BNC News.
It will start in 2026 with 10 drugs, a list of which will be available in 2023. An additional 15 drugs will be added in 2027 and another 20 in 2029 and beyond, the law says. This will be allowed for drugs covered by Medicare Part D that do not have a generic or comparable alternative. Drugs under Medicare Part B will eventually be included.
Drugmakers who fail to comply could face tax penalties unless they choose to remove the drug from Medicare.
Under the new law, diabetes patients under Medicare will also benefit from a specific drug cap. Insulin prices will be capped at $35 per month starting next year. This is considered important because adequate control of diabetes may require multiple vials of insulin – currently at great expense.
Medicare will still be able to choose which insulin products it covers and may not cover every insulin product, Neuman noted.
About 14% of Americans who use insulin face ‘catastrophic’ insulin expenses, costing 40% of what income they have left after paying for housing and food, a study recently published in the journal Health Affairs found.
Starting in 2025, Medicare patients will get a $2,000 cap on out-of-pocket spending on prescription drugs, which Dusetzina called the most important part of the law.
According to the Kaiser Family Foundation, about 1.4 million Medicare patients had outlays that exceeded $2,000 in 2020.
According to Medicare, this $2,000 benchmark is well below the $7,000 limit for receiving “catastrophic coverage” under previous arrangements. Patients who had achieved this catastrophic level of coverage would either pay a fixed co-payment of $10 to $20 per prescription or a coinsurance percentage of 5% of the cost of the drug.
The new law eliminates this coinsurance of 5% in 2024.
The personal spending limit will apply to all Medicare beneficiaries, regardless of income, said Juliette Cubanski, Medicare expert at the Kaiser Family Foundation. BNC News.
Dusetzina said patients with cancer or multiple sclerosis can currently spend tens of thousands of dollars a year on their drugs. Most patients are not eligible for existing low-income subsidies.
Seniors on Medicare will also no longer have co-pays for adult vaccinations starting next year. Drugmakers will also pay a rebate to Medicare starting in 2024 if their prices rise above inflation.
The Congressional Budget Office has more on prescription drug costs in the United States.
THE SOURCE: BNC News
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