“The Inflation Reduction Act of 2022 provides many benefits for retirees and older Americans.”
The goal for the Inflation Reduction Act of 2022 (IRA 2022) is to slow inflation, a great benefit to low-income seniors and those living on a fixed income, says a recent article titled “How the Inflation Reduction Act Impacts Retirees” from U.S. News & World Report. But there’s more for seniors.
The bill will help tackle health care costs for seniors, which have skyrocketed in recent years. So many of these provisions don’t go into effect for a few years, but something in the near future is better than nothing.
Other eventual benefits to seniors:
- Medicare may negotiate the prices on prescription drugs
- A cap on out-of-pocket costs for Medicare enrollees at $2,000
- A dramatic cost-reduction on co-pays for insulin for Medicare recipients
- No cost vaccines for Medicare Part D beneficiaries
Under current law, Medicare is banned from negotiating drug prices and is forced to pay market prices. When this law goes into effect, Medicare will be able to negotiate with the pharmaceutical companies and some drug prices should drop.
One caveat: the negotiated prices will be phased in over time. Pharmaceutical companies have a strong presence in Washington. Powerful lobbyists weren’t giving the store away. In 2026, Medicare may negotiate the price for the 10 most expensive drugs, in 2027, the 15 most expensive drugs and in 2029, the 20 most expensive drugs.
Some drugs have put severe cost pressures on Medicare Part D, so the government’s ability to negotiate prices will be impactful.
Rising health care and prescription prices are especially challenging to retirees living on a fixed income. Another big benefit of the new law is limiting the out-of-pocket responsibility to retirees for prescription drugs. However, it will be three years before this goes into effect, starting in 2025.
This aspect of the bill will be especially beneficial to Medicare Part D beneficiaries who take expensive drugs for cancer or multiple sclerosis. According to the Kaiser Family Foundation, an estimated 1.4 million Medicare Part D enrollees spend well over $2,000 in out-of-pocket costs for prescription drugs in 2020.
No-cost vaccines will be a boon to retirees, who will be able to get the shingles vaccine, the annual flu shot and other vaccines at no cost.
Enactment of the provisions is still several years away, but the future looks brighter for Medicare beneficiaries, a good thing in the face of inflation and rising costs for everything from apples to zucchini.
Reference: U.S. News & World Report (Sep. 15, 2022) “How the Inflation Reduction Act Impacts Retirees”