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And perhaps most important, the government will not negotiate drug prices for people with private insurance or no insurance. Seniors who rely on Medicare use a lot of health care and are an important voting bloc, but over 200 million people will still be paying unconstrained drug prices. For example, the new law provides for a cap on insulin co-pays at $35 per month, which is welcome news for people who need it to stay alive. But again, that provision applies only to the 3.3 million insulin users in Medicare, not to the millions of others who are uninsured or privately covered.
Democratic candidates may try to use this exclusion to their political advantage. The bill they proposed in the Senate included an insulin co-pay cap for people with private insurance. But because the Senate parliamentarian determined that the provision did not comply with budget rules, Republicans challenged it and voted it down.
One of the most tangible provisions of the law would reduce drug costs for Medicare beneficiaries with especially high medication expenses. Out-of-pocket drug costs would be capped at $2,000 per year, savings thousands of dollars for some patients with expensive illnesses like cancer. Over one million Medicare beneficiaries would benefit from this cap each year, though the vast majority of enrollees do not have drug expenses high enough to qualify in any given year.
The other big health care provision in the legislation would extend enhanced A.C.A. premium assistance for three years, through 2025. These subsidies, which were added as part of the American Rescue Plan in 2021 and are saving A.C.A. enrollees an average of over $700 annually on their premiums, were set to expire at the end of this year. If Congress had not acted, premiums would have skyrocketed by 53 percent, with notices going out to consumers right before the elections. Though Democrats will not be able to promise even lower premiums, they can say they prevented a huge premium hike — and a resulting political headache.
Having passed the Inflation Reduction Act, Democrats go into the midterm campaigns with a strong message to voters about relief from health care costs. Yet, as popular as their platform will be, its reach has limits. Drug-pricing restraints will not apply immediately or to everyone, and drugs account for less than 10 percent of health spending.
As always, the outcomes of elections have consequences. In fact, with the effects of drug price negotiation delayed until 2026 and enhanced A.C.A. premium assistance expiring that year, these elections and the ones in 2024 could well determine the shape of health care affordability into the future.
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