President Biden has signed the Inflation Reduction Act, the most significant advancement in addressing health care costs since the Affordable Care Act. The law will lower prescription drug prices by allowing the government to negotiate prices, while also capping out-of-pocket and insulin costs in Medicare. It also prevents pricey premium spikes for 1.5 million enrollees in Covered California.
On August 12th, in a divided, party-line vote, all 42 California Democrats voted to pass the Inflation Reduction Act, and all 11 California Republicans voted against it.
President Biden signing this law means millions of seniors in Medicare get a cap on out-of-pocket prescription drug spending, and another cap for insulin of $35 a month.
Beyond the policy win of giving Medicare the ability to negotiate the price of prescription drugs, the cap provides a practical financial benefit for over 115,000 California seniors and people with disabilities than spend more than $2,000 in medications each year, and hundreds of thousands more Californians getting better access to insulin or vaccines.
This signature also means locking in reduced premiums and preventing premium spikes for over 1.5 million with Covered California plans and frees up state dollars that will allow California to go even further in making our health coverage more affordable.
As Californians continue to struggle with the high cost of living in our state, we urge the Governor and Legislature to invest in eliminating deductibles in Covered California silver plans and reduce co-pays.
Deductibles should no longer discourage people from signing up for health insurance, or act as a financial barrier to needed care.
In California, some of the impacts include:
- 114,775 Medicare Part D enrollees in California who experienced out-of-pocket costs over $2,000 in 2021 will now have their prescription drugs capped at $2,000 per year.
- Over 5 million Californians on Medicare will be protected from Big Pharma’s arbitrary price hikes that raise drug prices faster than inflation.
- 332,770 Californians on Medicare will have insulin copays capped $35 per month.
- 1,599,264 Californians will save on monthly health insurance premiums.
Health Access recently broke down additional impacts by state, county, regional, and Congressional districts. Those that voted against the bill represent some of the most impacted constituents in the state, such as the Central Valley.
We appreciate those California Congressmembers who fought the drug lobby to finally allow Medicare to negotiate the best price for prescription drugs. Those who opposed the act voted against lower prescription drug prices, and to double the premiums for over one million in Covered California plans.