The Inflation Reduction Act allows the government to negotiate drug prices and caps prescription drug costs through the Medicare program.
The Centers for Medicare & Medicaid Services announced 2023 Medicare premium rates on Tuesday, confirming that they will decrease for the coming year.
The 3% decrease, a drop of approximately $5.20 a month, brings monthly Medicare Part B out-of-pocket premium costs down to close to $165. This is the first time premiums have decreased since they fell by 13% under President Barack Obama in 2012.
Health and Human Services Secretary Xavier Becerra announced the decrease in May, attributing it to the lower-than-expected cost of adding the Alzheimer’s drug Aduhelm in 2022.
President Joe Biden celebrated the lower premiums on Tuesday, reaffirming his commitment to bringing down health care costs and highlighting a new law he signed this year that could lead to future cost savings for families.
Speaking at the White House, Biden said the lower health care costs will give families “a little breathing room.”
Biden highlighted the Inflation Reduction Act, noting provisions in the law that affect the cost of medicine for Medicare patients.
After years of big pharma blocking it, Medicare will finally get the power to negotiate lower prescription drug prices. Seniors will see their out-of-pocket costs for prescription drugs be limited – as it comes into full force – to $2,000 a year. No senior on Medicare will have to pay more than $2,000 for all the prescriptions, whether it’s cancer drugs or anything else.
The law, which Biden signed on Aug. 16, requires the federal government to negotiate with pharmaceutical companies to set prices for some of the drugs covered by Medicare Part B and requires drug companies to pay out a rebate if prices for drugs used by Medicare beneficiaries are raised higher than the rate of inflation. Additionally, it creates a $2,000 cap on out-of-pocket costs for some Medicare beneficiaries beginning in 2025.
The Inflation Reduction Act passed Congress with unified opposition from Republicans in both the House of Representatives and the Senate. Vice President Kamala Harris cast the tie-breaking vote in the Senate to pass the bill.
Biden criticized ongoing Republican attacks against health care coverage and efforts to undermine Medicare, singling out National Republican Senatorial Committee Chair Sen. Rick Scott of Florida for his “Rescue America” plan for a potential Republican majority in Congress.
Scott’s plan calls for the sunsetting of all federal legislation, meaning all laws would expire and they, and the programs they authorize, would have to be reauthorized by Congress every five years, including Medicare and Social Security. Currently, the two programs do not sunset.
“Translated: If you don’t vote to keep it, you don’t get it,” Biden said, holding up a copy of Scott’s plan. “It means every five years you either cut it, reduce it, or completely eliminate it.”
At least a few Republican lawmakers appear open to changing the safety net programs.
Sen. Lindsey Graham of South Carolina said in June that a Republican majority would consider “entitlement reform” and that he was open to reducing the pool of people who can benefit from federal programs.
In an Aug. 2 interview, Wisconsin Sen. Ron Johnson said safety net programs should have to be reauthorized every year.
Despite their rhetoric, Republican lawmakers have not recently proposed legislation to make any cuts. National polling has shown strong support for Medicare. A Morning Consult poll of registered voters conducted in March 2021 found 55% support for a “Medicare for All” health insurance system.
Senate Minority Leader Mitch McConnell rejected the notion that his party would openly embrace Scott’s agenda, telling reporters in March, “We will not have as part of our agenda a bill that raises taxes on half the American people and sunsets Social Security and Medicare within five years.”
Published with permission of The American Independent Foundation.