WASHINGTON, December 3 (TNStalk) — The Council for Affordable Health Coverage released the following agency statement on December 2, 2022:
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As we prepare for a new year and a new CongressIt’s important to look back at the most impactful healthcare legislation passed this year, the Inflation Reduction Act (IRA), and consider how it will affect healthcare in the future.
The controversial legislation included major reforms on taxes, climate, energy financing and health care. The CAHC, along with other organizations, actively opposed the health care provisions of the IRA because they negatively impacted the cost of health care for all Americans – both on Medicare and on those with private or employer-sponsored coverage. The CAHC argued that the legislation kills competition and innovation, driving up costs and driving down lifesaving new drugs while doing nothing to reduce inflation.
However, after months of debate, lobbying and behind-the-scenes negotiations, the IRA was adopted and officially signed into law by President Biden on August 16, 2022. With the implementation of this new law, we must prepare for dramatic changes in Medicare, ACA subsidies, and drug pricing.
The health provisions voted include:
* Imposing price caps on Medicare Part B and D drugs
* Reform Part D benefits and cap out-of-pocket expenses
* Impose discounts on price increases above inflation
* Limit beneficiary out-of-pocket costs for insulin in Medicare to $35 a month
* Creation of a new additional payment for biosimilars in Part B
* Elimination of cost sharing for certain vaccines covered by Medicare
* Canceling a Trump-era rule requiring plans to pass patient discounts over the counter through 2032
* Expand ACA grants to high-income Americans, while providing more generous grants to lower-income Americans
The IRA has been positioned as the solution to reducing healthcare costs for all Americans, but it’s really an gutting of Medicare. The most detrimental aspect is its elimination of the government’s prohibition against interfering in private sector price negotiations in Medicare Part D. This is a classic “solution in search of a problem” DC-style. Part D consistently delivers high value to seniors, offering choices, low premiums, and consistently falling below budget. A 2020 survey by the Medicare Payment Advisory Board (MedPAC) found that 88% of Medicare beneficiaries age 65 and older said they were very or somewhat satisfied with the overall quality of their health care, compared with 82% of privately insured adults age 50-64.
The main reason for these high satisfaction rates is affordability. As health insurance premiums rise in 2023 for Americans who receive health insurance through their employer, the Medicare and Medicaid Service Centers (CMS) reports that Medicare premiums are expected to drop in 2023 by $32.08 at $31.50 with nearly 200 plans offering zero-dollar premiums for low-income enrollees.
But those low premiums may soon be a thing of the past, as the IRA replaces private plan negotiators, like Cigna, Humana and SVC Health – some of the most experienced and aggressive drug discounters in the country – with the Department of Health and Social Services (HHS). Taking power away from private plan negotiators and giving it to politicians and lobbyists, leaving patients on the sidelines. Americans should be afraid. We have seen how the government has handled COVID and how they are handling the budget – from now on government will shut down unless Congress can reach a last-minute agreement in December 16 – how are we supposed to believe that he knows best when to negotiate drug prices? The answer is simple, we cannot.
IRA price controls on Part B and D drugs are going to have a massive impact on innovation in the worst way possible. Since the adoption of Part D, more than 550 new products have come to market, treating everything from hepatitis C to cancer. Medicare patients tend to be older and disabled, which greatly increases the risk for manufacturers when developing treatments for conditions like Alzheimer’s disease, osteoporosis, arthritis and Parkinson’s disease. . The new price control efforts have a ceiling, but no floor. Manufacturers who refuse the government’s lowball offer will be subject to a confiscatory tax. It’s the government way or the highway. Why would a drugmaker risk wasting time and money creating a new drug knowing that the government will have the final say on price? The answer is that they wouldn’t.
The government belongs Congressional Budget Office (CBO) estimates that the number of drugs entering the US market would decrease by about one over the 2022-2031 period, four more over the next decade, and about five over the following decade. The University of Chicago estimates that price controls will reduce research and development spending by up to 60% from 2021 to 2039, resulting in up to 342 fewer new drugs. Fewer products on the market lead to less competition and higher costs, which the IRA was supposed to fix.
However, it’s not just brand name drugs that will suffer. The Association for Accessible Medicinesthe generic drugs trade association, said price controls “could lead to longer monopolies for expensive brand name drugs and reduce patient access to affordable generics and biosimilars.”
Before a biosimilar hits the market, a company has invested hundreds of millions of dollars in planning, development, and coordination with the FDA over at least a decade. The IRA lowers the introductory price of a biologic by 60%, making the biosimilar more expensive than the reference product. And, since we don’t know which drugs HHS will choose for price negotiations, investing in biosimilars may no longer make sense.
The impact of the IRA is already having an impact on biosimilars. On October 1st, Medicare has started paying more for some biosimilars. CMS must now pay 108% of the cost of the baseline biologic, a 2% increase that will be in effect for five years, costing Medicare — taxpayers — millions. So much for affordability. And more changes are coming in 2023.
Below is a timeline showing when the IRA’s healthcare provisions are expected to come into effect.
In part two of our review of the Inflation Reduction Act, we’ll dig deeper into each health care benefit and break down the direct impact it will have on patients and healthcare providers. WE health care system.
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Original text here: https://www.cahc.net/newsroom/2022/12/2/a-deep-dive-into-the-inflation-reduction-act-amp-what-it-means-for-the-future-of- Health care
