The Inflation Reduction Act, which President Joe Biden signed into law this week, is expected to keep 44,000 state residents insured in 2023.

According to a report released by the White House on Thursday, the act would also limit prescription and insulin costs for some Medicare users, lower health insurance premiums and provide expanded financial assistance to certain beneficiaries below the poverty level. .

“I think we’re going to have good cooperation from all sectors in the healthcare industry, whether it’s drug manufacturers, insurers, providers, to make this work because at the end of the day, we all want the same thing, “said US Health and Human Services Secretary Xavier Becerra in a phone call Thursday. “We want to make sure Americans are healthy and have access to quality care to keep them healthy.”

Health insurance tax credits were first introduced by the Affordable Care Act and strengthened by the American Rescue Plan in 2021. The act will extend the tax credits, rather than letting them expire.

An HHS report showed that 44,000 Alabama residents would lose state health insurance coverage entirely and 24,000 would lose subsidies if those tax credits expired. The Inflation Reduction Act extends the premium tax credit through 2025.

Alabamians using a Part D prescription drug plan through Medicare will see “increased financial protections” in 2024, according to the report from the US Health and Human Services. In 2025, a $2,000 cap on out-of-pocket prescription costs will go into effect. HHS wrote that of the 784,000 Alabamians who are Plan D beneficiaries, 22,000 pay more than the $2,000 cap on prescriptions.

Additionally, Medicare will be able to negotiate prices for high-cost drugs. HHS cited the Kaiser Family Foundation’s estimate that between 5 and 7 million Americans use drugs that would be eligible for negotiation.

The HHS report noted that Americans pay 2-3 times more than citizens of other countries pay for prescription drugs. In NiceRx’s 2021 Drug Report, Alabama ranked seventh in the US for the highest out-of-pocket prescription drug costs each year.

Dr. Meena Seshamani, deputy administrator of the Centers for Medicare and Medicaid Services and director of the Centers for Medicare and Medicaid Services, said she often cared for people facing high prescription costs as a practicing physician.

“All these numbers represent real people with real lives and real issues they’re dealing with. And as a doctor, I took care of those people in my practice and saw every day the struggles people had to be able to pay for the medications they needed to keep them healthy,” Seshamani said.

She recalled the struggle some patients faced, saying some were “choosing between food on the table and choosing between a prescription” or letting health conditions persist because they couldn’t afford medication.

A much-anticipated part of the Inflation Reduction Act is capping insulin at $35 a month. A report from GoodRx showed that average insulin prices rose 54% nationwide from 2014-2019.

According to the Centers for Disease Control and Prevention, Alabama 12.7% of adults in Alabama have been diagnosed with diabetes, compared to the national average of 9.8%. HHS reported that 63,000 Alabamians on Medicare used insulin in 2020. The new price cap will go into effect in 2023.

The act also provides “Extra Assistance,” or expanded low-income subsidies under Part D, beginning in 2024 for Medicare beneficiaries with incomes up to 150% of poverty. Currently, beneficiaries between 135-150% receive only partial assistance.

Those who qualify will pay no Part D premium and limited copayments. HHS reported that 12,000 Alabamians received partial assistance in 2020 and could benefit from the expansion.

Data from the U.S. Census American Community Survey estimated that 15.5% of Alabamians of all ages lived below the poverty level in 2019. Of residents 65 and older, the survey estimated that 10.5% lived below the poverty level.

In 2021, the US Census Bureau reported that the poverty line for a one-person household of one individual over age 65 was $12,996 and $16,379 for two adults over age 65.

The HHS report stated that the act would continue to lower premiums by an average of $750 per year for about 219,000 state residents. It would also require drug companies to pay Medicare a rebate if they raise drug prices faster than inflation, which HHS wrote would “further reduce out-of-pocket costs for Medicare beneficiaries beginning in 2023 “.

The health care changes are just a small part of the 730-page legislation, which also addresses issues such as climate change and taxes. Some Alabama Republicans voiced their disapproval of the Democratic-led bill and criticized the Biden administration after the president signed it into law on Tuesday.

The Kaiser Family Foundation released a timeline detailing when each health care change from the Inflation Reduction Act will happen through 2029.

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