President Joe Biden signed the Inflation Reduction Act of 2022 in August. This historic legislation will help millions of Medicare enrollees better afford their life-sustaining medications, and millions more Americans will be able to pay their Affordable Care Act premiums.
President Biden Signs Bill
“This law finally delivers on a promise that was made for decades to the American people,” allowing Medicare to negotiate prescription drug prices,” said Biden, “Because of this law, seniors are going to pay less for their prescription drugs and 13 million people are going to continue to save an average of $800 a year on health insurance.”
“AARP has fought hard to lower prescription drug prices for decades,” AARP CEO Jo Ann Jenkins said after the bill signing. “This is one of the most important pocketbook issues for older Americans. We have made our voice loud and clear: Drug prices have been out of control, and enough is enough!”
The Inflation Reduction Act for the first time authorizes Medicare to negotiate the prices of some high-cost prescription drugs with pharmaceutical companies, puts an annual $2,000 limit on how much Part D prescription drug plan members will have to pay out of pocket for their medications, and levies tax penalties on drugmakers that increase product prices by more than the rate of inflation. The new law also caps the cost of Medicare-covered insulin at $35 a month and eliminates out-of-pocket costs for most vaccines under Medicare.
Medicare will save hundreds of billions of dollars over 10 years as a result of the new law, with the majority of the savings coming as a result of prescription drug price negotiations and the rebates to Medicare designed to encourage pharmaceutical companies to keep price increases to no more than the rate of inflation, according to an analysis by the nonpartisan Congressional Budget Office.