In recent months, there has been a great deal of talk about inflation and how it will impact the economy as a whole. However, what many people don’t realize is that inflation can also have a significant impact on individual industries, including the price of health insurance and the cost of healthcare. This change in health care cost can affect you if you are an employee or buying your coverage directly from the Marketplace.
Today, we’ll take a closer look at how inflation could change your health insurance costs in the coming year. We’ll also explore some strategies you can use to keep those costs under control.
The Inflation Reduction Act is a policy from the federal government that includes essential payment reductions aimed to lower prescription drug costs, making healthcare insurance more affordable, and making the economy work for families in our nation. This helps challenge the increase of inflation, address consumer concern, and provide relief from higher costs in our economy in healthcare. This law means millions of Kansans and Americans will save money from meaningful benefits like:
Americans spend more than $1,500 per person every year on prescription drug medication. Medication cost in America is far higher than in other countries. One of the main reasons for these higher drug costs is a lack of market competition. The Inflation Reduction Act increases competition, which will lower the price of prescription drugs for people with Medicare.
The requirement for Medicare to negotiate prescription drug prices encourages drug makers to create new ways to do business, make an adjustment to cut cost, and reduce the payment for people so they can stay competitive. This competition helps improve treatments and ways of delivering medicines. This kind of negotiation isn’t new: The Departments of Defense and Veterans Affairs and the Indian Health Service have had the ability to negotiate drug prices for their health programs for decades. With the new law, Medicare will also finally be able to negotiate drug prices directly with manufacturers, ensuring people with Medicare pay lower costs on some of the costliest prescription drugs.
In 2023, Medicare will select and announce the first 10 drugs to be negotiated. The law requires that those 10 are chosen from a list of the highest-spending, brand-name Medicare Part D drugs that don’t have competition. The negotiated Medicare drug prices for these first 10 drugs will be available starting in 2026. Medicare will choose and negotiate 15 more Part D drugs for 2027, 15 more Part B or Part D drugs for 2028, and 20 more Part B or Part D drugs for each year after that. Manufacturers that don’t follow the negotiation rules for the selected drugs will pay a tax, and will pay a penalty if they don’t fulfill other manufacturer requirements.
The Inflation Reduction Act extends enhanced financial help to purchase health care insurance at HealthCare.gov and state-based Marketplace plans at a lower price, which was first made available under the American Rescue Plan. Extending this help means that many consumers who have a health insurance plan through HealthCare.gov and state-based Marketplaces will continue to save money on a monthly basis on the cost of their premiums.
Consumers in these plans saved an average of $800 on their premiums in 2021 as a result of the American Rescue Plan.
Without the Inflation Reduction Act, this help would have ended at the end of 2022 and resulted in an increase of plan costs at a higher rate. Instead, it will continue to be available through December 31, 2025.
Consumers will be able to see the savings reflected in their premiums when they shop for coverage at HealthCare.gov or state-based Marketplaces during the upcoming Open Enrollment Period or Special Enrollment Periods year-round.
Still have questions about how inflation might impact your premiums, out-of-pocket costs, or prescription costs? Speak with a Certified Health Navigator for FREE.
Health Navigators are individuals trained to help consumers, small businesses, and their employees as they look for health coverage options through the Marketplace, including completing eligibility and enrollment forms. These individuals (and organizations) are required to be unbiased.
Cover Kansas Health Navigators are a network of Health Navigators across the state of Kansas who are here to help you, completely free of cost. You can find a Navigator near you, or schedule a session with a remote Navigator on the Cover Kansas website or by calling (866) 826-8375.