Inflation Reduction Act: The Real Healthcare Agenda

hello this is dr eric bricker and thank you for watching a healthcare z today's topic is the inflation reduction act and the health care changes that are in

it that's right this is august of 2022 and the inflation reduction act was just passed by congress and signed by president biden and it has a lot of

health care regulations in it so we're going to go over those now and first up it has provisions for the affordable care act

plans the obamacare plans that you can buy on an exchange the subsidies were actually put in place by the american rescue plan but that was only that was a previous

piece of legislation by president biden and that was only temporary and so those uh additional subsidies were set to expire at the end of 2022 and so the inflation reduction act uh it continues

those subsidies for another three years so for 23 24 and through the end of 2025 okay number two now many of these changes now relate to medicare going

forward so for medicare's parts b and d specifically as it relates to prescription uh drugs part d because that's the prescription drug program for medicare and then part b because that's

for drugs that are like infusions are actually done through the uh the medical claims not the pharmacy claims that medicare is actually going to be able to

negotiate with pharmaceutical companies for 10 drugs starting in 2026 and then that's going to increase the number of drugs over time to the point where it's

20 drugs as of 2029 and of course this is a major change because previously the government had not been able to it's it now what's going to go on in this negotiation i mean is that

just a nice word for price setting there's going to be some degree of price setting for prescription drugs now keep in mind the government already does price setting today for like physician

fees and hospital fees right i mean medicare like sets okay well this is what we're going to pay the doctors and medicare's like okay this is what we're going to pay the hospitals so essentially this is kind of getting the

pharmaceutical industry kind of in line what it already does for hospitals and doctors but it's not even doing it for all the drugs it's just starting i mean they're phasing it in right this is what a lot of legislation has right it's you know they're pushing it out right it's

not going to happen immediately it's not going to happen until 2026 and then it's not going to be with all drugs it's only going to be with 10 and they're going to slowly increase it over time right so it's the whole sort of boiling frog technique right where if you put a frog

in water it's less likely to hop out if you slowly turn up the temperature of the water over time right so they're just using that approach here in this legislation for medicare now it is you know how you know

it's controversial right it's like okay well it's going to decrease investment and new drugs you know yada yada yada that is not the topic for today's video it's just what's in the legislation i

want to make you aware okay next up part d again for the prescription drugs the prescription drug prices in medicare part d plans must be

less than the rate of inflation going forward now granted inflation's pretty high right now it's at eight percent but the point is is that the cost of those drugs can't go up by more than the amount of

inflation again it doesn't start right away it starts in 2023 but that's just just a few short months away so let's say inflation stays at eight percent that means the prices cannot go up by more than eight percent and let's say

three years from now inflation's only at two percent then the the price of the drugs can only go up by two percent now which prices they talk about it's actually there's great information i'll leave a link in the show notes to the kaiser

family foundation and to the commonwealth foundation articles uh about this and it talks about like different ways you measure pricing so the devil's in the details that hasn't been completely sort of hashed out yet

okay now insulin specifically for people that uh have diabetes and are on insulin insulin copays are going to be maxed out at 35 a month you cannot have an insulin copay for greater than more than 35

dollars a month starting in 2023 again this is for part d plans only okay vaccine out of pocket costs are zero

dollars so the big one's like obviously covet vaccine flu vaccine but then also like pneumonia vaccines uh as well zero dollar out of pocket cost for vaccines

um there's also expansion for vaccine coverage for medicaid and for chip plans the the children's health insurance plan for kids and that goes into effect in 2023

then also for medicare part d there is a 2 000 out of pocket max for the year so people seniors are not going to have to pay more than 2 000 total for their

prescription dogs if they're on medicare part d starting in 2025 now for the premiums because you actually have to pay a premium for medicare part d plans

it has to be they have to be a less than six percent per year increase starting in 2024 and going through 2030.

so let's say the premium was a hundred dollars well then it can't be more than and six dollars because it has to be less than six percent starting in 2024 through

2030 okay next up they are ex for for low income seniors they are expanding the subsidy because there's actually subsidies for these premiums that you have to pay so if

you're a senior and you don't have a lot of money they say okay well you don't have to pay the premium we'll give you a subsidy they extend they expanded that to 150 of the federal poverty level and

also they when you had out-of-pocket costs historically in excess of two thousand seven hundred dollars you still had to pay five percent co-insurance on top of that in other words your

out-of-pocket costs didn't stop you still had to pay that co-insurance after 2 700. well anyway

2 700. well anyway they got rid of that okay so they're so going forward you're not gonna have to pay that five percent additional coinsurance once you've hit that

catastrophic uh amount now specifically as it relates to employer-sponsored plans there is a small piece in the

legislation related to that and that is the inflation reduction act it delays the removal of the anti-kickback

safe harbor for pbms and if you know what that means congratulations you're in like the top 0.001 percent of healthcare knowledge in

america that's a super confusing statement right there so let's unpack that so right now pbms are able to receive payments from pharmaceutical companies they're called rebates right

but the pharmaceutical company pays the pbm okay now that could be considered a kickback so pbms have a safe harbor that

exempts them from that anti-kickback law so that pbms can receive these rebates slash kickbacks from pharmaceutical companies that can happen

during the trump administration they said we want to stop that but it's not going to be stopped until 2027 five years from now well this law pushes

that back even further to 10 years from now in 2032 then pbms are not going to

be able to be exempt from the anti-kickbacks statute anymore therefore if this actually happens in 2032

pbms will no longer be allowed to receive rebates or kickbacks from pharmaceutical companies so they've essentially given the pbm industry a sort of a and by default the health

insurance industry a sort of 10-year extension on continuing on making money uh this way on their medicare part d now this only applies to medicare part d this doesn't apply to any of the the pbm

payments that pharmaceutical companies give them for commercial folks this is just for the government folks now over so it's hugely confusing right a lot of stuff going on here um helpful to

just understand what's in the legislation and when it takes effect what's the point obviously um i'll leave a link to a fantastic article from the purchaser's business group on

health which of course advocates for self-funded uh employers and their employees on their health plans they're like look there's been cost shifting in the health care industry

for for our hospitals where medicare sets you know reimbursement hospitals and hospitals like okay we're just going to turn around and we're going to charge self-funded employers more and they're and the the pacific excuse me the

purchasers business group on health is saying hey look the same thing's going to happen with prescriptions you're going to sort of limit these payments on the prescription side through a variety of these nachonations here and so as a

result the pharmaceutical companies are just gonna turn around and charge self-funded employers more to you know quote-unquote cross-subsidize from the commercially insured folks to

cover the loss of revenue from their uh their government payer so is that gonna happen i don't know but i don't have a crystal ball nobody has a

crystal ball it's a reasonable conclusion however keep in mind the overall goal of

many in washington dc is to expand medicare okay so you know in order to expand medicare it's helpful to make medicare

as attractive as possible well all of this all of these health care changes in the inflation reduction act make medicare more attractive they make

medicare part d more attractive they make aca plans more attractive right one of the goals that uh president biden whether you agree with this or not that's not the point the point is is

that one of the goals that president biden had was to one of the ways to expand medicare was to decrease the age of medicare eligibility from 65 to 60.

well more people are going to be in favor in fact a lot of businesses would probably be in favor of reducing the medicare age from 65 to 60 so that

they can get on this this better health plan they're like my employer sponsored health plan it's really expensive etc etc this government plan seems pretty good well the more attractive the government can make that plan then the

more people and frankly the more businesses that are going to be in favor of expanding medicare coverage now who does who doesn't like this who is not directly involved in this that doesn't like this it's actually the

hospitals in america because the largest force against the expansion of medicare and the reduction of the medicare beneficiary age from 65 to 60 are

hospitals in america because the medicare reimbursement for those 60 to 65 year olds is much lower than the commercial insurance reimbursement that they currently get today and which folks

on commercially insured plans drive more of the claim cost it's the older folks it's the people over 45 the people over 55 the people between the ages of 60 and 65

and so just know that the inflation reduction act is not an island in of itself it's part of an overall

multi-year likely multi-decade strategy to make government-financed healthcare more attractive so that it can frankly be expanded now

that's just my take on it you could disagree with that's totally fine but that's what i wanted to share with you today thank you for watching a healthcare z