SUBSCRIBE TO OUR FREE NEWSLETTER
Daily news & progressive opinion—funded by the people, not the corporations—delivered straight to your inbox.
5
#000000
#FFFFFF
5
#000000
#FFFFFF
Prescription pills are shown with $20 bills. (Photo: www.ccPixs.com/Flickr/cc)
Inflation Reduction Act Will Not Cut Benefits--It Will Reduce Medicare Drug Costs
By reducing the price of drugs, Medicare will be able to both spend less and provide better benefits to seniors and people with disabilities.
Aug 10, 2022
The Inflation Reduction Act, which the Senate has passed and the House is set to consider later this week, will reduce the cost of prescription drugs that are covered by Medicare, thereby saving money for both the Medicare program and its beneficiaries, and improve Medicare drug benefits. Contrary to some claims, the bill will not cut Medicare benefits or take money away from Medicare.
To the contrary, the bill will improve Medicare drug benefits by limiting the total amount of cost sharing that a beneficiary will be required to pay in any year.
The bill will reduce Medicare's drug costs in several ways. It will require the federal government to negotiate with manufacturers to obtain lower prices for some high-cost drugs, require drug companies to pay rebates to Medicare if their prices rise faster than overall inflation, and repeal a Trump Administration rule on drug rebates. The bill will also improve Medicare's drug benefit by placing a $2,000 annual limit on out-of-pocket drug spending, capping out-of-pocket insulin expenses at $35 a month, eliminating cost sharing for vaccines, and expanding eligibility for the low-income drug subsidy. Currently there is no limit on total out-of-pocket or insulin spending. In total, these changes will save the government about $250 billion over ten years and will also lower premiums and cost sharing for Medicare beneficiaries.
Some critics of the legislation have falsely contended that it would cut Medicare benefits and take money away from Medicare. For example, in the Senate debate Senator James Lankford said, "This Inflation Reduction Act takes the savings from this new prescription plan from Medicare and takes it out of Medicare. . . . It literally takes money designed for 76-year-olds on a fixed income and gives them to 26-year-olds and their family." Similar claims have circulated in political advertisements and on social media.
Assertions like this are inaccurate and have been widely debunked by budget analysts and fact-checking organizations. The Inflation Reduction Act will reduce Medicare spending by lowering the prices of some prescription drugs furnished through the program, not by cutting benefits. To the contrary, the bill will improve Medicare drug benefits by limiting the total amount of cost sharing that a beneficiary will be required to pay in any year. By reducing the price of drugs, Medicare will be able to both spend less and provide better benefits to seniors and people with disabilities.
An Urgent Message From Our Co-Founder
Dear Common Dreams reader, It’s been nearly 30 years since I co-founded Common Dreams with my late wife, Lina Newhouser. We had the radical notion that journalism should serve the public good, not corporate profits. It was clear to us from the outset what it would take to build such a project. No paid advertisements. No corporate sponsors. No millionaire publisher telling us what to think or do. Many people said we wouldn't last a year, but we proved those doubters wrong. Together with a tremendous team of journalists and dedicated staff, we built an independent media outlet free from the constraints of profits and corporate control. Our mission has always been simple: To inform. To inspire. To ignite change for the common good. Building Common Dreams was not easy. Our survival was never guaranteed. When you take on the most powerful forces—Wall Street greed, fossil fuel industry destruction, Big Tech lobbyists, and uber-rich oligarchs who have spent billions upon billions rigging the economy and democracy in their favor—the only bulwark you have is supporters who believe in your work. But here’s the urgent message from me today. It's never been this bad out there. And it's never been this hard to keep us going. At the very moment Common Dreams is most needed, the threats we face are intensifying. We need your support now more than ever. We don't accept corporate advertising and never will. We don't have a paywall because we don't think people should be blocked from critical news based on their ability to pay. Everything we do is funded by the donations of readers like you. When everyone does the little they can afford, we are strong. But if that support retreats or dries up, so do we. Will you donate now to make sure Common Dreams not only survives but thrives? —Craig Brown, Co-founder |
© 2023 Center on Budget and Policy Priorities
Paul N. Van De Water
Paul N. Van de Water is a Senior Fellow at the Center on Budget and Policy Priorities, where he specializes in Medicare, Social Security, and health coverage issues.
The Inflation Reduction Act, which the Senate has passed and the House is set to consider later this week, will reduce the cost of prescription drugs that are covered by Medicare, thereby saving money for both the Medicare program and its beneficiaries, and improve Medicare drug benefits. Contrary to some claims, the bill will not cut Medicare benefits or take money away from Medicare.
To the contrary, the bill will improve Medicare drug benefits by limiting the total amount of cost sharing that a beneficiary will be required to pay in any year.
The bill will reduce Medicare's drug costs in several ways. It will require the federal government to negotiate with manufacturers to obtain lower prices for some high-cost drugs, require drug companies to pay rebates to Medicare if their prices rise faster than overall inflation, and repeal a Trump Administration rule on drug rebates. The bill will also improve Medicare's drug benefit by placing a $2,000 annual limit on out-of-pocket drug spending, capping out-of-pocket insulin expenses at $35 a month, eliminating cost sharing for vaccines, and expanding eligibility for the low-income drug subsidy. Currently there is no limit on total out-of-pocket or insulin spending. In total, these changes will save the government about $250 billion over ten years and will also lower premiums and cost sharing for Medicare beneficiaries.
Some critics of the legislation have falsely contended that it would cut Medicare benefits and take money away from Medicare. For example, in the Senate debate Senator James Lankford said, "This Inflation Reduction Act takes the savings from this new prescription plan from Medicare and takes it out of Medicare. . . . It literally takes money designed for 76-year-olds on a fixed income and gives them to 26-year-olds and their family." Similar claims have circulated in political advertisements and on social media.
Assertions like this are inaccurate and have been widely debunked by budget analysts and fact-checking organizations. The Inflation Reduction Act will reduce Medicare spending by lowering the prices of some prescription drugs furnished through the program, not by cutting benefits. To the contrary, the bill will improve Medicare drug benefits by limiting the total amount of cost sharing that a beneficiary will be required to pay in any year. By reducing the price of drugs, Medicare will be able to both spend less and provide better benefits to seniors and people with disabilities.
Paul N. Van De Water
Paul N. Van de Water is a Senior Fellow at the Center on Budget and Policy Priorities, where he specializes in Medicare, Social Security, and health coverage issues.
The Inflation Reduction Act, which the Senate has passed and the House is set to consider later this week, will reduce the cost of prescription drugs that are covered by Medicare, thereby saving money for both the Medicare program and its beneficiaries, and improve Medicare drug benefits. Contrary to some claims, the bill will not cut Medicare benefits or take money away from Medicare.
To the contrary, the bill will improve Medicare drug benefits by limiting the total amount of cost sharing that a beneficiary will be required to pay in any year.
The bill will reduce Medicare's drug costs in several ways. It will require the federal government to negotiate with manufacturers to obtain lower prices for some high-cost drugs, require drug companies to pay rebates to Medicare if their prices rise faster than overall inflation, and repeal a Trump Administration rule on drug rebates. The bill will also improve Medicare's drug benefit by placing a $2,000 annual limit on out-of-pocket drug spending, capping out-of-pocket insulin expenses at $35 a month, eliminating cost sharing for vaccines, and expanding eligibility for the low-income drug subsidy. Currently there is no limit on total out-of-pocket or insulin spending. In total, these changes will save the government about $250 billion over ten years and will also lower premiums and cost sharing for Medicare beneficiaries.
Some critics of the legislation have falsely contended that it would cut Medicare benefits and take money away from Medicare. For example, in the Senate debate Senator James Lankford said, "This Inflation Reduction Act takes the savings from this new prescription plan from Medicare and takes it out of Medicare. . . . It literally takes money designed for 76-year-olds on a fixed income and gives them to 26-year-olds and their family." Similar claims have circulated in political advertisements and on social media.
Assertions like this are inaccurate and have been widely debunked by budget analysts and fact-checking organizations. The Inflation Reduction Act will reduce Medicare spending by lowering the prices of some prescription drugs furnished through the program, not by cutting benefits. To the contrary, the bill will improve Medicare drug benefits by limiting the total amount of cost sharing that a beneficiary will be required to pay in any year. By reducing the price of drugs, Medicare will be able to both spend less and provide better benefits to seniors and people with disabilities.
We've had enough. The 1% own and operate the corporate media. They are doing everything they can to defend the status quo, squash dissent and protect the wealthy and the powerful. The Common Dreams media model is different. We cover the news that matters to the 99%. Our mission? To inform. To inspire. To ignite change for the common good. How? Nonprofit. Independent. Reader-supported. Free to read. Free to republish. Free to share. With no advertising. No paywalls. No selling of your data. Thousands of small donations fund our newsroom and allow us to continue publishing. Can you chip in? We can't do it without you. Thank you.