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 Reduce Prescription Drug Costs

To mark the start of the 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 reduce prescription drug costs to build on his administration’s work to reduce costs for workers families and middle-class families.

Americans are squeezed by the cost of living – that’s been true for years, and it’s a key reason the president is running. Health care costs in particular drive inflation. Too many Americans face challenges paying for prescription drugs. On average, Americans pay two to three times more than people in other countries for prescription drugs, and one in four Americans who take prescription drugs struggle to afford the drugs. Nearly three in ten American adults who take prescription drugs say they’ve missed doses, cut pills in half or not filled prescriptions because of cost.

The Inflation Reduction Act — which President Biden and congressional Democrats delivered — tackles that problem and locks in an average of $800 a year in lower health care premiums for 13 million families, lowers prescription drug prices and limits their out-of-pocket costs. prescription drug costs of $2,000 per year. The Inflation Reduction Act protects Medicare beneficiaries from catastrophic drug costs by phasing in a cap on pharmacy out-of-pocket costs, setting a monthly cap of $35 per insulin prescription, requiring companies that raise prices faster than inflation , to pay a rebate to Medicare and allows Medicare to negotiate prices for expensive prescription drugs for the first time. Meanwhile, Republicans in Congress have said their top priority is to repeal the Inflation Reduction Act, ending those cost-saving and price-raising provisions for tens of millions of Americans.

To further reduce health care costs, the Treasury Department earlier this week took action to fix the so-called “family issue” rule, which made it harder for families to afford health coverage for their spouse or child. About 1 million Americans will either gain coverage or have their insurance made more affordable as a result of the new rule.

Lower 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 monthly supply of insulin will be capped at $35 from January 1, 2023.
  • Medicare beneficiaries will pay $0 out-of-pocket for recommended vaccines for adults 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 have to pay a rebate to Medicare.

Earlier this year, HHS released a report showing that the cost of 1,200 prescription drugs rose faster than inflation in the past year alone. For example, one maker of a drug used to treat high blood pressure and heart failure used by millions of Medicare beneficiaries increased the price of the drug by nearly 540 percent in 2022. Another drug used to treat autoimmune conditions increased by $1000 this year alone.

During Medicare Open Enrollment — from Oct. 15 to Dec. 7 — seniors and other beneficiaries will be able to choose drug coverage that reflects these new cost savings, putting money back in their pockets.

Medicare beneficiaries should visit Medicare.gov or call 1-800-MEDICARE to review their options for next year and make sure their health and prescription drug coverage is right for them.

Using the HHS Innovation Center to further reduce 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 reduce prescription drug costs. This includes the use of an “Innovation Center” at HHS created by the Affordable Care Act, which has the authority to test new ways to pay for Medicare services that improve the quality of care while reducing costs.

Under the executive order, HHS will have 90 days to submit a formal report outlining any plans to use the Center for Innovation authorities to reduce drug costs and promote access to innovative drug therapies for Medicare beneficiaries. This action will build on the landmark drug pricing reforms of the Inflation Reduction Act and help provide additional breathing room for American families.

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