AARP tells the story of the recently passed into law – Inflation Reduction Act...
The Inflation Reduction Act for the first time authorizes Medicare to negotiate the prices of some high-cost prescription drugs with pharmaceutical companies, puts an annual $2,000 limit on how much Part D prescription drug plan members will have to pay out of pocket for their medications, and levies tax penalties on drugmakers that increase product prices by more than the rate of inflation. The new law also caps the cost of Medicare-covered insulin at $35 a month and eliminates out-of-pocket costs for most vaccines under Medicare.
Medicare saves hundreds of billions of dollars over 10 years as a result of the new law, with the majority of the savings coming as a result of prescription drug price negotiations and the rebates to Medicare designed to encourage pharmaceutical companies to keep price increases to no more than the rate of inflation, according to an analysis by the nonpartisan Congressional Budget Office. That means beneficiaries will be able to get the same medications they do now, but some of those drugs will cost them, and Medicare, less. The savings will not be the result of any cuts to the Medicare program.
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