The New Way that Medicare Negotiates Drug Prices Will Help You Thanks to the Inflation Reduction Act

Have you ever wondered if there might be a way to reduce your prescription drug costs? A recent legislative act, known as the Inflation Reduction Act, might just be the solution we've all been waiting for.

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TRANSCRIPT
It turns out that President Biden has delivered on one of his significant promises with this Act. The objective is to lower prescription drug costs, make health insurance more affordable, and ensure the economy works better for ordinary working families. In essence, this law aims to bring meaningful benefits that would reverberate across all 50 states, the United States territories, and the District of Columbia.

Let's dig deeper into these promised benefits and the specifics of how they’ll affect Americans. Firstly, we have the lower prescription drug prices. Through the Inflation Reduction Act, Medicare now has the power to negotiate prices with manufacturers, a change that could have far-reaching effects on the cost of medicines.

Another significant change is the yearly cap on out-of-pocket prescription drug costs for people on Medicare. This limit, set at $2000 in 2025, will undoubtedly lighten the financial burden of those managing chronic illnesses. In addition, this law aims to keep health insurance premiums low through HealthCare.gov and the state-based Marketplaces, further easing the financial strain on families.

Medicare recipients, in particular, will be the first to feel the impact of this Act. Before the Inflation Reduction Act was signed into law, over 5 million people relying on Medicare were grappling with the high cost of prescription drugs. This law has made significant changes that will lead to a reduction in prescription costs for millions of people with Medicare.

The affordability of insulin has been a hot topic for years now, and this new legislation promises to be a positive step forward. With the Inflation Reduction Act, the cost of insulin for those with Medicare will now be capped at no more than $35 for a month's supply. This law also exempts insulin from any deductibles, providing further relief for those managing diabetes.

Next, let's talk about competition, a cornerstone of any thriving economy. The Inflation Reduction Act aims to increase competition, thus lowering the price of prescription drugs for people with Medicare. The law now mandates Medicare to negotiate prescription drug prices directly with manufacturers, a significant shift from the previous system.

This move towards negotiation is not new. Other departments like Defense and Veterans Affairs and the Indian Health Service have been successfully negotiating drug prices for their health programs for decades. The new law now empowers Medicare to follow suit, ensuring people with Medicare have access to affordable prescription drugs.
The Inflation Reduction Act isn't just a short-term solution. It also lays the groundwork for future improvements to Medicare. The law expands Medicare benefits by instituting program improvements designed to save money. The goal is to make healthcare more accessible and affordable without imposing additional costs on taxpayers.

Starting in 2025, there will be a new Manufacturer Discount Program in Medicare. This program will require drug manufacturers to provide discounts on certain brand-name drugs, including types of drugs called biologics and biosimilars. This will apply both in the initial coverage phase and the catastrophic phase of the Medicare prescription drug benefit.
But there's more. The Inflation Reduction Act also brings good news regarding vaccines. It improves coverage and lowers out-of-pocket costs for recommended vaccines in Medicare, Medicaid, and the Children’s Health Insurance Program. This will no doubt be a boon for public health.
Lastly, the Inflation Reduction Act doesn't forget about those seeking coverage through HealthCare.gov and state-based Marketplaces. The new law extends the enhanced financial help that was implemented by the American Rescue Plan, ensuring many consumers continue to save money on their premiums.

So, whether you're currently grappling with medical costs or you're concerned about future healthcare expenses, the Inflation Reduction Act brings a glimmer of hope.

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