Jeff Fuentes Gleghorn
President Biden signed the Inflation Reduction Act into law on August 18 after Congress passed it along party lines, delivering major health care savings to tens of thousands of Colorado residents on Medicare. There are over 700,000 people in Colorado on Medicare Part D, which helps to cover the cost of medication for seniors and people with disabilities. The bill addresses rising health care costs in several ways.
First is by capping out of pocket drug expenses. People on Medicare Part D will now have their out-of-pocket pharmacy costs capped at $2,000 per year. According to the Kaiser Family Foundation, there are around 19,000 people in Colorado who would have spent more than $2,000 on medication without this law, and around 10 percent would have spent over $5,000. The law will also cap insulin costs for people relying on Medicare, ensuring that insulin will not cost more than $35 a month.
The bill also gives Medicare the power to negotiate some drug prices for the first time in two decades. This will begin in 2023, saving money for people on Medicare and the federal government. Even for medications that are exempt from negotiation, the Inflation Reduction Act will make pharmaceutical companies pay a rebate to Medicare if they increase drug prices faster than inflation. This will protect people who rely on Medicare from unnecessary price increases.
Additionally, Medicare Part D income assistance will be expanded. People earning up to 150 percent of the federal poverty line will receive full income assistance instead of partial income assistance. Free vaccines for people on Medicare Part D will also be made available starting in 2023. Beginning next year, adult vaccines will be free to people who rely on Medicare Part D for their healthcare.
The Congressional Budget Office, a non-partisan group that analyzes bills for Congress, found that the healthcare portion of the Inflation Reduction Act would save the federal government $288 billion over the next ten years. The Inflation Reduction Act will start saving money for people in Colorado and the federal government in 2023.