Just What The Doctor Ordered

President Biden along with stalwart Democratic and sensible Republican legislators deserve credit for including in the Inflation Reduction Act (IRA) caps on the money paid by Medicare recipients for prescribed drugs. That good news, unfortunately, gets buried in a bill filled with other and unrelated provisions that dominate commentary on right-wing media and FOX News.

But someone is listening.  Just last week Eli Lilly, after months of pressure from ordinary citizens and the Biden Administration, agreed to cap out-of-pocket costs for insulin at $35 dollars a month—that figure, not coincidentally, is the exact restriction mandated by the Inflation Reduction Act for Medicare recipients.  

And the bill goes much further, the IRA’s broader language mandating that all out of pocket expenses for drug prescriptions for all citizens on Medicare irrespective of income, political affiliation, or favorite beer be limited to $2000 a year. Those savings might not mean much to Elon Musk or Governor DeSantis, but for average Americans, and even average American millionaires, it’s very good news.   

Families of modest means will benefit significantly. Individuals in poverty will hugely benefit. The Commonwealth Fund estimates that Medicare recipients spend on average “$3,024 per year on out-of-pocket costs” for medical care. Twenty-five percent of that three-thousand dollars is spent on prescription drugs. The average cost cited in the study derives from an analysis of Americans at all ranges of income and with varying medical coverage.  For a household making $400,000 a year a 25% reduction for the cost of prescribed medication can be a welcome boon. For citizens making $40,000 a year—which range includes millions of non-college and hard-working citizens, teachers, firefighters, nurses, folks in agriculture and the service industry—these savings represent a medical and financial lifeline.

Fiscal hawks should be applauding this legislation. The Journal of the American Medical Association estimates that had the present provisions in the IRA been in place from 2018 to 2020 “the government could have cut costs by $26.5 billion...” Those savings represent “5% of the estimated net Medicare Part B and Part D drug spending over those 3 years.” These are not one-time savings. These are savings that with the recently passed Inflationary Reduction Act will continue year after year.

And insulin will not be the last drug to be capped.

Included in the IRA are provisions to negotiate prices for a whole host of prescribed drugs essential to the health of millions of Americans with real savings on the federal ledger. The Department of Health and Human Services is not exaggerating to declare that “For the first time in history, because of the Inflation Reduction Act, Medicare will have the ability to negotiate prescription drug prices. That process begins in 2023, and the first negotiated prices will go into effect in 2026.” 

Americans forced to choose between paying rent or paying for essential medications  welcome the authority now granted to the federal government to negotiate the price of essential drugs with private-sector providers. Caps on insulin and drugs to come will be a godsend for lower-income citizens. And these mandates-- passed with bi-partisan support-- will save the government billions of dollars, year after year. 

So, whether you are Republican, Democrat, libertarian or just an ordinary person with diabetes and high levels of cholesterol, you need to be aware that there is a lot more in the Inflation Reduction Act than gets regularly covered on FOX News or the blogosphere.  For too many Americans it’s a matter of life and death.

Darryl Wimberley
Staunton, Va