Senate Democrats’ wide-ranging environmental and health care legislation has passed the U.S. House of Representatives and is set to get the President’s signature Tuesday.
The package, known as the Inflation Reduction Act, would create a drug price negotiation program for Medicare so the government health insurance program could potentially reduce the price for which its patients purchase medication. The bill passed the Senate earlier this month by a 51-50 vote, with Vice President Kamala Harris breaking the party-line tie. Democrats used a procedure known as reconciliation, which can be used to pass budget-related bills to avoid a Republican filibuster. The bill then passed the Democratic-controlled House along party lines Friday, and will head to President Joe Biden to be signed Tuesday.
Last month, Senate Majority Leader Chuck Schumer (D-NY) announced the compromise legislation alongside Senator Joe Manchin, a conservative West Virginia Democrat. Manchin opposed the Build Back Better plan proposed earlier this year by Democratic leadership, which would have also included a drug negotiation program, and prevented it from passing the evenly divided Senate. The stated goal of the bill is to reduce health care and energy prices.
To begin, Medicare will only negotiate the price of 10 drugs, although there could be up to 20 medications under the program over the next decade. These negotiated prices would only be available for Medicare recipients. In an interview last month, Medicare specialist Emily Gang of The Medicare Coach, said the program would be most effective if it targets medications that are expensive for Medicare recipients specifically.
“Some medications on Medicare are really affordable, like a lot of the generics—it’s not a big deal,” she said. “There are other medications out there that tend to be more expensive. And what’s unfortunate is that, when people join Medicare, they lose certain coupon programs or certain subsidies and they end up paying a lot more money. It doesn’t happen with a lot of medications, but it is happening.”
Commentary on the bill poured in over the past week from health care officials and groups around the country. In a statement last week, U.S. Secretary of Health and Human Services Xavier Becerra said in addition to the drug price program, the bill would also prevent Medicare premiums from rising too quickly and cap drug costs.
“With this bill, millions of Americans will see lower health care costs,” Becerra said in the statement. “The Inflation Reduction Act locks in premiums that save 13 million people an average of $800 per year. For anyone who relies on Medicare, the bill will put a $2,000 cap on their out-of-pocket costs for the prescription drugs that they need. In addition, it will do something that we have tried – and failed – to do in Washington for decades—allow Medicare to negotiate a better deal on prescription drugs.”
AARP applauded the passage of the bill, and said prescription drug prices are a key issue for older adults.
“We have been working for nearly two decades to allow Medicare to negotiate the price it pays for medications,” reads the organization’s statement. “This bill will save Medicare hundreds of billions of dollars and give seniors peace of mind knowing there is an annual limit on what they must pay out-of-pocket for medications. Lowering prescription drug prices is a top priority for Americans, with more than 80% of people across both political parties supporting the measure. We thank all the senators who voted today to lower drug prices.”
The National Council on Aging also had a positive response to the legislation, which it writes will especially benefit adults living on fixed incomes.
“Millions of older adults who live on a fixed income and struggle with high health care costs will breathe a sigh of relief when this legislation caps their out-of-pocket drug costs at $2,000 per year, allows Medicare to negotiate drug prices, strengthens assistance for low-income beneficiaries, and limits drug price increases,” the organization’s statement reads. “These measures will help them stretch their precious Social Security dollars a little bit further and enable them to afford the medications they need, especially in this time of rising inflation.”
The Council’s President, Ramsey Alwin, specifically praised price caps on insulin for seniors in an opinion column for The Hill, saying it would specifically benefit Black and Hispanic Americans. However, he called on Congress to do more to keep health care costs down.
“The legislation is a first down payment on ensuring that all Americans can age with dignity. But more is needed,” Alwin wrote in the column. “According to the Elder Index, it costs an older adult in poor health between $2,000 and $2,500 every month to afford the basic necessities of food, health care, housing and transportation. When you consider that the average Social Security benefit in January 2022 was $1,600 per month, it’s clear there’s a significant gap to fill.”