FACT SHEET: President Biden Takes Action to Lower Health Care and Prescription Drug Costs for Americans
President Biden Signs Executive Order Directing HHS to Explore Additional Actions to Lower Prescription Drug Costs
To mark the start of Medicare Open Enrollment season, President Biden will travel to Irvine, California, on October 14th and Portland, Oregon, on October 15th to highlight how seniors can take advantage of the Inflation Reduction Act’s cost-saving provisions as they shop for new health insurance plans. The President will also sign an Executive Order directing the Department of Health and Human Services to explore additional actions it can take to lower prescription drug costs to build on his Administration’s work lowering costs for working and middle-class families.
Americans are squeezed by the cost of living – that’s been true for years and is a key reason the President ran. Health care costs in particular are driving inflation. Too many Americans face challenges paying for prescription drugs. On average, Americans pay two to three times as much as people in other countries for prescription drugs, and one in four Americans who take prescription drugs struggle to afford their medications. Nearly three in ten American adults who take prescription drugs say that they have skipped doses, cut pills in half, or not filled prescriptions due to cost.
The Inflation Reduction Act – which President Biden and Congressional Democrats delivered – tackles that problem and locks in on average $800 per year lower health care premiums for 13 million Americans, lowers seniors’ prescription drug prices, and caps their out of pocket expenses for prescription drugs at $2,000 per year. The Inflation Reduction Act protects Medicare beneficiaries from catastrophic drug costs by phasing in a cap for out-of-pocket costs at the pharmacy, establishing a $35 monthly cap per prescription of insulin, requiring companies who raise prices faster than inflation to pay Medicare a rebate, and allowing Medicare to negotiate prices for high-cost prescription drugs for the first time ever. Republicans in Congress, meanwhile, have said their top priority is to repeal the Inflation Reduction Act, ending these cost-saving provisions and raising prices for tens of millions of Americans.
To further lower health care costs, earlier this week, the Treasury Department took action to fix the so-called “family glitch” rule that was making it harder for families to afford health care coverage for their spouse or child. About 1 million Americans will either gain coverage or see their insurance become more affordable as a result of the new rule.
Lowering Medicare Costs This Open Enrollment Season
Starting this January, seniors and other Medicare beneficiaries will begin to see the benefits of these cost-saving measures. Because of the Inflation Reduction Act:
- A month’s supply of insulin will be capped at $35 starting on January 1, 2023.
- Medicare beneficiaries will pay $0 out of pocket for recommended adult vaccines covered by their Part D plan, including the shingles vaccine – which costs seniors up to $200.
- Prescription drug companies that try to raise their prices faster than inflation will be required to pay Medicare a rebate.
Earlier this year, HHS released a report showing that the price of 1,200 prescription drugs rose faster than inflation in just the last year. For example, one manufacturer of a drug used to treat high blood pressure and heart failure, used by millions of Medicare beneficiaries, increased the drug’s price by nearly 540 percent in 2022. Another drug used to treat autoimmune conditions increased by $1000 just this year.
During Medicare Open Enrollment – running from October 15 to December 7 – seniors and other beneficiaries will be able to choose drug coverage that reflects these new cost-savings, putting money back into their pockets.
Medicare beneficiaries should visit Medicare.gov or call 1-800-MEDICARE to review their options for the coming year, and make sure their health and prescription drug coverage is right for them.
Using HHS’ Innovation Center to Further Bring Down Costs
As the Biden-Harris Administration works to implement the Inflation Reduction Act, President Biden will sign an Executive Order today directing the Department of Health and Human Services to consider additional actions to further drive down prescription drug costs. That includes leveraging the “Innovation Center” at HHS, created by the Affordable Care Act, which has authority to test new ways of paying for Medicare services that improve the quality of care while lowering costs.
Under the Executive Order, HHS will have 90 days to submit a formal report outlining any plans to use the Innovation Center’s authorities to lower drug costs and promote access to innovative drug therapies for Medicare beneficiaries. This action would build on the Inflation Reduction Act’s landmark drug pricing reforms and help provide additional breathing room for American families.
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