With the passage of the Inflation Reduction Act (IRA) we saw millions of insulin dependent Medicare beneficiaries receive their life saving drug at $35. On January 1, 2025, the next major provision enacted has all Medicare beneficiaries being able to cap their out-of-pocket drug costs at $2,000 for the year.
In the first year alone, it is estimated that approximately 3.2 million beneficiaries will see savings. By 2029, this number is anticipated to grow to over 4 million.
According to the Kaiser Family Foundation (KFF), had the cap been in place in 2021, 1.5 million Medicare beneficiaries would have saved money due to the fact that their out-of-pocket drug cost exceeded $2,000. KFF looked back over a 10-year period, from 2012 to 2021, and found that over 5 million Part D enrollees had out-of-pocket drug costs of over $2000 or more in at least one year, showing the long-range impact of the cap going forward.
In addition to the $35 and $2,000 caps the bill authorized Medicare to negotiate with pharmaceutical companies to lower the cost of some of the highest priced and most utilized drugs on the market. Which at first glance sounds like a real win for us consumers. But in typical DC give and take, Medicare was limited to initially negotiate for ten drugs.
Since the typical formulary (list of covered drugs), depending on the drug plan you’re on, has between 3,000 and 6,000 covered drugs, it’s a drop in a very large bucket.
The drugs they chose were: Eliquis, Jardiance, Xarelto, Januvia, Farxiga, Entresto, Enbrel, Imbruvica, Stelara, and NovoLog/Fiasp. For those of you on these Tier 3 drugs you won’t see a price reduction until January 1, 2026.
The discounts are significant, but since most individuals on these drugs also have other drugs as well, the $2,000 cap will be the most significant aspect going forward. For example, Eliquis’ 2023 list price used for negotiations was $561. They discounted it to $176, a 69% reduction. Yet still with an annual cost of over $2,000.
The IRA allows for additional price negotiations going forward:
January 1, 2027, an additional 15 Part D drugs will have negotiated prices implemented. President Biden just announced the list: Ozempic; Rybelsus; Wegovy, Trelegy Ellipta, Xtandi, Pomalyst, Ibrance, Ofev, Linzess, Calquence, Austedo; Austedo XP, Breo Ellipta, Tradjenta, Xifaxan, Vraylar, Janumet; Janumet XP, and Otezla.
January 1, 2028, Up to 15 more drugs, including those covered under Part B, will be added to the negotiation list. So, all you cancer patients hang in there. Only four years till you get help.
On Jan. 1, 2029, and subsequent years Medicare will expand list to include 20 additional drugs each year.
I think the IRA is an amazing achievement. Impacting millions of individuals. Providing them with financial relief in an arena where they have no control. Pay for the medicine or die. Yet it all might be for naught.
The IRA was passed on party lines. In the Senate all 50 Democrats voted in favor, and all 50 Republicans voted against. Vice President Harris cast the tiebreaking vote to pass the bill. In the House of Representatives, the vote was similarly divided along party lines. Consequently, the IRA may be in jeopardy due to the incoming administrations criticism of the bill and seeking retribution. Which would be a terrible mistake and harm countless numbers of people. The Medicare provisions of the bill serve all Medicare beneficiaries no matter what party affiliation.
Medical debt is a significant issue among Medicare beneficiaries. In 2020, nearly 4 million adults aged 65 and older reported having unpaid medical bills, despite 98% of them having health insurance coverage.
A 2022 survey by the KFF found that more than one in five adults aged 65 and older (22%) had some form of debt resulting from medical or dental bills.
Additionally, a study published in JAMA Health Forum in December 2021 revealed that nearly 11% of Medicare beneficiaries struggled to pay their medical bills and delayed care due to financial constraints.
The choice is clear. Win with grace and protect the most vulnerable among us or seek revenge and harm millions — including those who put you there.
In a recent interview, Goldenberg emphasized that the burden of medical debt is not limited to any specific demographic or political group. He stressed the importance of addressing this issue through bipartisan efforts, highlighting the need for policy changes that prioritize affordable healthcare for all Americans.
As the healthcare system continues to face challenges, it is crucial for policymakers to come together to find solutions that alleviate the financial strain placed on individuals and families. Medical debt should not be a partisan issue, but rather a shared concern that requires collaboration and compassion.
Fred L. Goldenberg’s advocacy for affordable healthcare and his commitment to addressing medical debt transcends political boundaries. By recognizing that this issue affects individuals regardless of their party affiliation, we can work towards creating a healthcare system that is equitable and accessible to all.
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