Democrats say new law will lower drug costs for seniors

CEDAR RAPIDS — Eastern Iowa health care officials say the federal Inflation Reduction Act signed into law this week by President Joe Biden will significantly cut health care costs for seniors and also help low-income Iowans better manage, afford and plan for health care expenses.

But they also say more needs to be done.

“Eighty-six percent of the 250,000 patients that we serve in Iowa are 200 percent or below the federal poverty line,” said Keri Edmonds, director of risk management at the Eastern Iowa Health Center in Cedar Rapids.

The federally qualified health center serves patients regardless of their ability to pay, including vulnerable children and adults, in Benton, Linn, Jones, Iowa and Johnson counties.

“So when they have to make those decision between paying for rent or food or taking their medications, it’s these really heart-wrenching stories that we really see throughout the state,” Edmonds said. “And I think that this will be truly incredible and will save lives for many of the patients across the state.”

The roundtable discussion with health care professionals on the new bill was convened by state Sen. Liz Mathis, a Democrat running for Iowa’s 2nd Congressional seat, and Minnesota U.S. Sen. Amy Klobuchar, a 2020 Democratic presidential candidate in the city to campaign for Mathis.

The discussion was held at Tanager Place Clinic, 1030 Fifth Ave. SE, but a Tanager official noted the nonprofit takes no position on political issues or candidates.

What the law does

President Joe Biden on Tuesday signed the Inflation Reduction into law. The $740 billion health care and climate package includes provisions aimed at lowering health care and prescription drug costs for seniors.

The law allows Medicare to negotiate prices of some high-cost drugs with pharmaceutical companies, saving the federal government some $288 billion over the 10-year budget window, according to the non-partisan Congressional Budget Office.

It also caps out-of-pocket spending on drugs at $2,000 a year for those on Medicare, beginning in 2025, and lets seniors spread out their drug costs throughout the year into monthly payments.

The act also limits insulin costs to $35 per month for those on Medicare, starting in 2023; requires companies to pay Medicare a rebate if drug prices increase faster than inflation; and extends subsidies provided during the COVID-19 pandemic to help some Americans who buy health insurance on their own.

Medicare is the federal health insurance program for Americans 65 and older, as well as some younger people with disabilities.

Prescription costs

Waterloo City Council member Rob Nichols, a pharmacist, said while Medicare and Medicaid pay pre-negotiated fees for health care goods and services — and soon for some high-cost drugs — those fees do not cover actual costs, leading providers to charge several times more for privately insured patients in an attempt to recoup their fees, driving up the cost of care for everyone.

Health care panelists, too, lamented the monthly insulin price cap does not include those covered by private insurance, a provision pushed for by Senate Democrats but blocked by Senate Republicans.

“We’re really excited for what we’ve done,” Klobuchar said. “It’s a major game-changer. … But, it’s, again, just a beginning, not an end. Because we need to add more drugs into the mix (to be negotiated by Medicare), which could be the next big game-changer. We need to also expand who gets the benefits of less-expensive drugs” by extending the law’s cost-saving provisions to more drugs, more quickly.

Mathis said she favors efforts to push for a $35-a-month cap on insulin for those on private insurance, both at the state and federal level.

She also wants to see social determinants of health — environmental conditions that affect a wide range of health outcomes and risks, such as education, housing, economic stability and reliable transportation — included in health care billing procedures.

“So providers can bill for certain things that would precipitate better health,” like transportation for a child with diabetes to attend doctors visits and helping families into permanent, stable housing, Mathis said.

Mathis said she supports the new law, arguing it will lower health insurance premiums and drug costs for seniors, address the climate crisis and help reduce the national deficit.

Hinson argues law will not constrain inflation

Republicans, including U.S. Rep. Ashley Hinson, who Mathis is running against, voted against the Inflation Reduction Act, arguing it represents more federal government taxing and spending and will not constrain inflation.

The legislation, they argue, does not directly address some of the main drivers of surging prices, from gas and groceries to rents and prepared meals.

The nonpartisan Congressional Budget Office concluded this month that the changes would have a “negligible” impact on inflation this year and next. The University of Pennsylvania’s Penn Wharton Budget Model concluded that, over the next decade, “the impact on inflation is statistically indistinguishable from zero.”

Still, the law could save money for some Americans by lessening the cost of prescription drugs, extending health insurance subsidies and reducing energy costs. It also would modestly cut the government’s budget deficit, which might slightly lower inflation by the end of the decade.

"Iowans are getting crushed by Democrat-caused inflation, but Liz Mathis is ignoring their pain by supporting more inflationary spending and tax hikes on working families so wealthy people can get discounted electric vehicles,“ Hinson campaign manager Sophie Crowell said in a statement. ”Ashley will continue to be a strong check on the Biden-Pelosi spending agenda that Liz Mathis will rubber-stamp."

Hinson, too, has argued capping out-of-pocket insulin costs at $35 a month will raise insurance premiums as companies try to recoup lost profits.

She said that having the federal government control drug prices will eliminate competition within the pharmaceutical industry and leave patients without access to new, lifesaving drugs.

In contrast, Hinson said she supports House Republicans’ proposed Lower Cost, More Cures Act.

The legislation, among other provisions, includes a monthly $50 post-deductible cap for insulin and insulin supplies for seniors in the Medicare Part D program.

The bill also seeks to lower how much American families pay out-of-pocket for insulin by encouraging insurers to cover more of the cost for enrollees in high-deductible health plans. It calls for more drug price transparency and seeks to increase competition and bring new products, including insulin, to market sooner.

Dem pushback

Health and Human Services Secretary Xavier Becerra and Meena Seshamani, deputy administrator and director of Center for Medicare, pushed back on Hinson’s claims during a White House press call Thursday.

Seshamani said Medicare negotiations will take into account manufacturer-specific data on research and development cost, cost of production costs and evidence about treatments — all of which “can improve affordability while driving market competition and scientific innovation.”

Becerra said negotiations will ensure seniors receive a fair price that’s closer to what individuals in many other countries pay. He noted studies showing Americans pay more than twice as much than many people around the world for the same prescription drugs, “and many of them made here in America.”

He added: “(A) nyone who offers insulin, whether it’s the manufacturer, or the provider or the insurance plan should be able to justify why they have to charge more than $35 (for a monthly supply).”

See how much the White House says Iowans could save in health care costs

The White House on Thursday released state-specific estimates as to how much Americans stand to save in prescription drug and health care costs under the Inflation Reduction Act signed into law earlier this week by President Joe Biden.

According to the White House, the act will cap prescription drug costs for hundreds of thousands of Iowa Medicare beneficiaries, reduce health insurance premiums for tens of thousands of Iowans by about $1,170 per year on average, expand coverage to about 15,000 Iowans, and cap insulin co-payments for the tens of thousands of Iowa Medicare beneficiaries that use insulin.

Here’s what the White House estimates the law will mean for Iowans:

• Each year the $2,000 out-of-pocket cap for Medicare Part D drug coverage will benefit about 22,000 Iowa Medicare beneficiaries, according to estimates from the Kaiser Family Foundation

• A $35 per month cap on insulin copays will benefit some 34,000 Medicare beneficiaries in Iowa that used insulin in 2020

• About 3,500 Iowa Medicare beneficiaries who received partial help paying drug costs in 2020 would receive full help under an income-eligibility expansion for low-income subsidies

• Some 56,000 Iowa Medicare beneficiaries would receive free vaccines for Medicare Part D, starting in 2023

• About 72,000 Iowans with marketplace coverage would save about $1,170 on average annually from American Rescue Plan Act subsidies the Inflation Reduction Act continues through 2025

• About 15,000 more Iowans at risk of becoming uninsured would have health insurance coverage next year due to extension of the American Rescue Plan’s premium tax credit provisions.

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