Dr. Loh: Medical implications of the Inflation Reduction Act

To say that I have disliked writing columns on COVID for the last 2 1/2 years is a gross understatement. I began writing my columns intermittently since the mid-1990s and regularly since 2000. The focus usually has been on healthcare topics that could be misunderstood by the public due to cursory or otherwise incomplete reporting by mainstream media.

These confusing issues became worse with the advent of social media, and almost incredulously even more so with the rise of polarized social media sources that targeted their audiences with the precision of the best (or worse) marketing firms. The subsequent noise generated by the cacophony of talking, or, more accurately, yelling heads often drowned out what useful information actually existed in order to accrue more advertising income to enrich themselves.

I am providing this background because we are in such a period now. It will likely rise in pitch between now and the mid-term elections in November, take a brief pause until ramping up again before the 2024 election campaign. Oh joy. I’m sure we can all hardly wait. Not.

Given the worldwide trauma of Ukraine, including the impact on food supplies, energy costs and the supply chain crises that include the global mismanagement of semi-conductor manufacturing, plus the little issue of COVID and its impact on all aspects of quality of life for the majority of humans, what has hit home for most has been the pocketbook issue of inflation. The root causes of worldwide inflation are multifactorial, but simple minds like simple solutions because more complete and objective explanations make heads hurt.

Not to worry, I’m not even going to try to simplify the situation, but instead want to look at the medical implications of the gigantic and impactful piece of legislation just passed (barely) by Congress and signed by President Biden. It really doesn’t matter which side of the political spectrum one sits, since almost everyone, or someone one knows and cares about, will be affected.

First, the healthcare provisions of the Inflation Reduction Act (IRA) provide Medicare Parts B (hospital) and D (prescription drugs) the power to negotiate the prices of some brand-name drugs that have no generic or bioequivalent. Starting in 2026, 10 drugs will be eligible for negotiations with their manufacturers. Fifteen drugs will be eligible in 2027 and 20 drugs will be eligible by 2029. If successful, more drugs may be added in the future.

This has been a huge goal of healthcare reform for many decades, since the impact of negotiating for millions of patients has more heft than negotiating for a few thousand, and Medicare was precluded from doing so until now because of the so-called noninterference clause. This effectively ends the 19-year-old ban that began when Medicare Part D was created in 2003.

Beginning next year, the IRA will limit the out-of-pocket spending on insulin in Part D Medicare to $35 per month. It was originally written to include private pay or commercial insulin, but objections arose from the usual suspects so it was dropped for now. The IRA will also eliminate cost-sharing of adult vaccines under Medicare and Medicaid. These changes will yield substantive savings for affected patients for life-preserving interventions.

Starting in 2024, the IRA will eliminate the 5% cost-sharing in the catastrophic phase of Medicare Part D. This cost sharing provision, or so-called “doughnut hole,” applies after enrollees reach $7,050 in out-of-pocket expenses for covered drugs. In 2025, that out-of-pocket cost in Medicare Part D will be capped at $2,000. The Kaiser Family Foundation estimates that these provisions may reduce costs for more than 4 million Medicare recipients.

The IRA puts inflation caps in Medicare Part D that limits price increases for medications year over year. Drug makers will have tax penalties if their prescription drug price increases exceed inflation. Don’t let the naysayers blow smoke by saying this will stifle innovation. As a clinical researcher for decades, let me assure you that novel and breakthrough drugs will continue to be developed. But the “me, too” drugs that add little to care may take a hit.

There will be a 6% cap on Part D premium costs from 2024 to 2029 to prevent excessive increases in premiums. And the premium subsidies in the Accountable Care Act marketplaces that were increased by the 2021 American Rescue Plan Act were set to expire at the end of this year. The IRA extends those subsidies through 2025 which will prevent approximately 13 million Americans from losing coverage and facing premium increases next year.

A legitimate question is where will the money to cover all of this come from? The IRA is paid for by new taxes (including a new minimum tax) on large corporations, many of which have used loopholes in the past to avoid paying any taxes. Additionally, there will be increased IRS enforcement and audits on wealthy individuals (annual incomes greater than $400,000) and entities, with additional monies going to reduce the huge federal deficit, estimated by the nonpartisan Congressional Budget Office to be about $288 billion over 10 years.

Of course, not one current federally elected Republican voted for the Inflation Reduction Act. In the past, bipartisan support was routine after vigorous debate of these issues as important as these. Voting as a block did not come into vogue until the mid-1990s when Newt Gingrich brought in the seeds of the Tea Party and power was distributed based on loyalty to the party line. And here we are … not Democrats and Republicans, liberals and conservatives, but Democrats versus Republicans, liberals versus conservatives. The idea as expressed in our Declaration of Independence is that we are all Americans. Not who is more American or a “real” American.

Ideally, we should not have an “us versus them” mentality if our fragile democracy is to thrive. The tenants of liberalism and conservatism each have merit and are worthy of debate. I suspect that most educated Americans have views on topics that straddle these philosophies. In our history, liberals gave us the women’s right to vote, a woman’s right to choose what happens to her own body, civil rights for under-represented and voiceless groups, Medicare, Medicaid, Social Security, workers compensation, protection of the right and ability to vote, and the separation of church and state. The most radical of conservatives have suggested (really) that these doctrines should be “sun-setted,” that is, phased out, as proposed most recently by Republican Senator Rick Scott of Florida.

America is a republic still, so if those things are something you want to go away, then vote for those people to represent you. But if you think those elements are things we should preserve as signs of a maturing society, then vote for the candidates who share your views.

Irving Kent Loh, M.D., is a preventive cardiologist and the director of the Ventura Heart Institute in Thousand Oaks. Email him at drloh@venturaheart.com.

This article originally appeared on Ventura County Star: Dr. Loh: Medical implications of the Inflation Reduction Act