Coming in 2024: Health care savings for millions of Americans
As we head into 2024, there is much to celebrate on the health care front. First, millions of Americans will save money on prescription drug costs in 2024 because of actions taken by President Biden and a previous Congress. And second, enrollments under the Affordable Care Act marketplaces are soaring to record numbers.
On January 1 of this year, a new provision of the Inflation Reduction Act took effect. This provision caps Medicare out-of-pocket prescription drug costs at $3,300 per year (next year, the cap falls to $2,000).
The health care policy research organization KFF (formerly known as Kaiser Family Foundation) estimates that well over 1 million beneficiaries will be helped by the new cap.
And KFF offers some examples of why and how these savings will occur. Take three examples of drugs taken to treat different types of cancer – Lynparza, Ibrance, and Xtandi. Last year, Medicare Part D enrollees who used any of these three drugs for the entire year faced annual out-of-pocket costs around $12,000, but this year that price tag will drop to about $3,300 for each drug.
These savings are in addition to an insulin copay cap of $35 that took effect a year ago. And still to come: The Biden Administration has begun negotiations over prices for 10 high-priced drugs, with the new, lower prices slated to kick in in 2026.
Unfortunately, KFF polling shows that most older Americans are unaware of the savings that have already been realized, that take effect this year, or the ones that are scheduled in future years. About 25 percent know about the new cap on out-of-pocket prescription drug costs that took effect January 1, while less than half are aware of the 2023 insulin co-pay cap. About one-third know about the provision in the Inflation Reduction Act that requires the federal government to negotiate prices for high-cost drugs for Medicare patients.
“President Biden and Democrats in Congress have made lowering health care costs a top priority, and they have delivered on their promise,” the health care advocacy group Protect Our Care said in a statement. “By passing the Inflation Reduction Act, Democrats extended premium tax credits on the Affordable Care Act (ACA) marketplaces, capped insulin costs for seniors at $35 per month, made shingles and other essential vaccines free, and protected people on Medicare from outrageous price hikes. Together, these provisions are already saving families thousands of dollars on their health care costs. President Biden has also begun implementing the Inflation Reduction Act’s Medicare Drug Price Negotiation program, which will lower costs on some of the costliest medications on the market.”
On a related note, the Biden Administration announced this week that a record-breaking 21.3 million people signed up this year for health insurance through the Affordable Care Act marketplaces. The deadline for enrolling or re-enrolling was January 15; the 21.3 million total represents a whopping 30.7 percent increase over the previous year.
Much of the expansion was encouraged by the Biden Administration and a previous Congress’ decision to make marketplace subsidies larger and available to more people. It also helped that the Biden Administration increased outreach to inform people about their marketplace insurance options and extended enrollment periods. About 15 percent of the new enrollees (2.4 million people) had previously been insured through Medicaid or the Children’s Health Insurance Program (CHIP). They were a small fraction of the 15.7 million terminated from Medicaid as states conducted a massive effort to redetermine eligibility after the end of the public health emergency. Especially in states that have not expanded their Medicaid programs, adults losing Medicaid were likely to have incomes below the federal poverty line – an income too low to be eligible for marketplace health insurance.
Nevertheless, red states benefited the most from the huge increase in enrollments: West Virginia (80.2%), Louisiana (75.9%), Indiana (59.6%), and Tennessee (59.5%). Seven other states saw increases of 45 percent or more – Alabama, Arizona, Arkansas, Georgia, Mississippi, South Carolina, and Texas.