President Joe Biden signed the Inflation Reduction Act into law Aug. 16. The sweeping $739 billion reconciliation package contains a number of significant healthcare provisions.
During the signing ceremony in the State Dining Room, the president described the IRA as "one of the most significant laws in our history" and with its enactment "the American people won and special interests lost."
Here are seven healthcare takeaways from the IRA:
1. Under the IRA, Medicare Parts B and D gain negotiation powers that will apply to the price of a limited number of drugs with no generic or biosimilar competition. Starting in 2026, 10 drugs will be eligible for negotiations. Eligibility expands to 20 drugs by 2029.
2. The law ends a 19-year-old ban on Medicare from negotiating the price of prescription medicines with manufacturers. The government was prohibited from directly negotiating drug prices in Medicare Part D, the prescription drug coverage program created in 2003.
3. Starting in 2023, the IRA limits out-of-pocket spending on insulin products in Medicare Part D to $35 per month. It also eliminates cost-sharing for adult vaccines under Medicare Part D and under Medicaid.
4. Effective in 2024, the IRA eliminates the 5 percent cost-sharing in the catastrophic phase of Medicare Part D, which kicks in after enrollees reach $7,050 in out-of-pocket costs for covered drugs. Effective in 2025, the law caps patients' out-of-pocket costs in Part D at $2,000.
5. The IRA institutes inflation caps in Medicare Part D that limit price increases for drugs year over year. Drugmakers face tax penalties if their price increases to prescription drugs in Medicare outpace the rate of inflation.
6. The law includes a cap in Part D premium cost growth at 6 percent from 2024 to 2029 to prevent large premium increases.
7. Premium subsidies in the ACA marketplaces that were increased by the 2021 American Rescue Plan Act were set to expire at the end of 2022. The IRA extends the subsidies through 2025, which will prevent millions of people from losing coverage and seeing increases to their premiums.