COMMENTARY: Congress and Biden did right by Medicare recipients

By Lindsey Copeland

The Medicare Rights Center thanks President Biden for signing—and the House and Senate for passing—the Inflation Reduction Act (IRA) of 2022. This landmark legislation includes policies we have long championed to make healthcare and prescription drugs more affordable.

Thanks to the IRA:

  • More low-income Medicare beneficiaries will be able to afford coverage and care.The bill eliminates the partial Part D Low-Income Subsidy (LIS) benefit—which left enrollees exposed to high costs—and extends eligibility for the more comprehensive full subsidy to those who would have qualified: with incomes between 135 and 150 percent of poverty and resources at or below the partial LIS limits.
    In 2020, over 400,000 Part D enrollees received partial LIS benefits, including a disproportionate number of Blacks and Hispanics. Under the IRA, these individuals will receive more robust assistance; their annual out-of-pocket costs will fall by $300, on average. Those who take expensive specialty drugs, where the program’s 15 percent co-insurance rate can be a burden, will see even greater savings. For example, partial LIS enrollees would have paid around $1,700 for a year’s worth of Humira or Enbrel in 2020, while full LIS enrollees would have paid less than $20.
  • All 48 millionPart D enrollees will finally be protected from limitless and uncertain prescription drug costs. The bill creates a $2,000 cap on annual out-of-pocket spending and allows these costs to be paid monthly. It also eliminates the 5 percent co-insurance requirement for catastrophic coverage and holds Part D premium growth at no more than 6 percent per year.
    4 million non-LIS enrollees spent $2,000 or more in 2020, and 1.3 million reached the catastrophic coverage threshold ($6,350). These new financial protections will be especially helpful for beneficiaries who take high-cost drugs and may spend thousands of dollars in the catastrophic coverage phase.
  • Insulin will be more affordable. The IRA limits insulin co-payments to $35 per month for Part D-covered products and for insulin furnished under Part B, with no deductible.
    Currently, over 3 millionPart D enrollees use insulin, and one in three have diabetes. On average, in 2020, they paid $600 out of pocket for insulin. But some had considerably higher costs—25 percent spent over $800 and 10 percent over $1,300.
  • People with Medicare will be able to receive critical vaccines free of charge, eliminating cost-sharing and deductibles for Part D vaccines that are recommended by the Advisory Committee on Immunization Practices, such as shingles, and under Medicaid. This policy already applies to Medicare Part Band most private plans. Its expansion will improve access to necessary preventive care. This will help the approximately 4 million Medicare beneficiaries who receive a Part D-covered vaccine each year—including the 6 million who received the shingles vaccine in 2020, at an average cost of over $100. However, it will also reach millions more. Research shows Part D immunization rates are well below those for Part B, likely due to cost-sharing. The additional expense is a barrier to beneficiary receipt of recommended vaccines.
  • Marketplace plans will remain affordable. The IRA temporarily extends the Affordable Care Act premium subsidies that have helped an unprecedented number of Americans gain coverage, often easing Medicare transitions and costs. These enhanced tax credits have allowedover 80 percent of older adult Marketplace enrollees (ages 55 to 64) to qualify for a plan with a monthly premium of $50 or less. Consumers ages 50 to 64 have saved over $950 on annual premiums, on average. The IRA ensures even more older adults will have access to this affordable, high-quality coverage.

Critically, the bill also begins to address the drivers of Medicare prescription drug unaffordability by requiring Medicare to negotiate drug prices, penalizing manufacturers for price hikes that outpace inflation and better-aligning Part D pricing incentives. While the number of beneficiaries who will see lower drug costs in any given year under these provisions, and the magnitude of those savings, will depend on a myriad of to-be-determined factors, these reforms are widely expected to strengthen Medicare and enrollee financial security.

For millions of current and future Medicare beneficiaries, the protections and structural improvements will be nothing short of life-saving. Every day on Medicare Rights’ national helpline, we hear from older adults and people with disabilities who are struggling to pay for care. They may go without or cut back on other basic needs like food or rent, just to fill a prescription. The IRA will help ensure fewer people face these impossible choices.


Lindsey Copeland is director of federal policy for Medicare Rights, an advocacy and information organization on Medicare-related issues for older adults.