Inflation Reduction Act: ‘We have definitely hit the ground running,’ Medicare director says

Medicare Director and CMS Deputy Administrator Dr. Meena Seshamani joins Yahoo Finance’s Anjalee Khemlani to discuss the future of Medicare, the future of government-funded health care in the U.S., the Inflation Reduction Act, and making health care more affordable and accessible.

Video Transcript

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ANJALEE KHEMLANI: Welcome back to "Yahoo Finance Live." I'm Anjalee Khemlani. Now to the health care debate. Leading doctor groups are pushing Congress to change the way Medicare pays physicians. It comes at the same time as debate ramps up over potential cuts to entitlement programs. This, as a divided Congress faces division over how to balance the federal budget.

Here to discuss the future of Medicare is the Center for Medicare Director Dr. Meena Seshamani. Dr. Seshamani, thank you so much for joining us today.

MEENA SESHAMANI: Thank you for having me, Anjalee.

ANJALEE KHEMLANI: So I know there's a lot going on in Congress obviously, so we have to start there. Really big target on Medicare's back right now. It is one of the largest line items in the federal budget, which is actually similar to what businesses and employers know. Health care in general, one of the largest line items. So just right now, how do you feel about everything that's going on?

MEENA SESHAMANI: Well, I think that we are making tremendous strides with the Medicare program to continue to serve the more than 63 million people who rely on our program, where we are looking to advance health equity, so everyone has a fair and just opportunity to achieve their optimal health.

To really expand access to affordable coverage and care and to drive innovation so that we have high quality, whole person care for everyone in the program. And really, to collaborate and partner with everyone in the health care ecosystem, so we can be good stewards of the program and make sure that we are delivering for those millions of people who rely on our program for their health and their needs.

ANJALEE KHEMLANI: This debate coming, of course, after you already got that win with the Inflation Reduction Act, looking to negotiate drug prices as well as reduce inflation. So, already taking steps to really control the costs there. Where are you in that process right now? I know there's some hiring going on. Do you feel like everything is going according to timeline right now?

MEENA SESHAMANI: Yes, we have definitely hit the ground running. We have already implemented several of the provisions in the Inflation Reduction Act, or new drug law, that really provide financial relief to people with Medicare.

For example, starting January 1, people with prescription drug coverage in Medicare don't have to pay more than $35 for a month supply of a covered insulin product that they're taking. They also have access to recommended vaccines at no cost to them. That went into effect on January 1.

And in the month of January, as well, we put out a timeline for how we will work to stand up the drug, Medicare drug price negotiation program. Kind of laying out, here our various data collection aspects, guidances, where we're going to want to make sure that we are getting input from everyone in the field.

And we also put out guidance around the inflation rebate program, which holds drug companies accountable for drug prices that increase faster than the rate of inflation. And that is out for comment now as well.

ANJALEE KHEMLANI: Absolutely. We'll be keeping an eye on that. Looking also at Medicare Advantage, that's been another area where there has been discussion about what the cost has been to the federal government and what the rates are that have been paid out, and whether or not there's been overpayment as well.

So looking at where the companies are right now, they're all really growing their presence more and more. Medicare Advantage plans are available on the market. What does that tell you about what needs to be done in order to help lower the cost here?

MEENA SESHAMANI: Medicare Advantage is a critical part of the overall Medicare program, along with traditional Medicare and Medicare prescription drug coverage. And as we started our conversation, Anjalee, where we can harness to be able to advance health equity, drive innovation for high quality whole person care, expand access to coverage and care.

And in that vein, last year we put out a request for information to again, engage everybody in the health care ecosystem to identify where there are opportunities to strengthen and improve the Medicare Advantage program.

We got more than 4,000 comments. And themes from those comments are now coming out in some of the policies that we're proposing. For example, around having clearer rules of the road for prior authorization, to make sure that people with Medicare Advantage can access the care that they need.

Around marketing, to have oversight for misleading marketing practices that can otherwise lead to people not necessarily making the choice that's best for them. For strengthening behavioral health, as well. And also, for making sure that that Medicare dollar is going towards the kind of care that people need.

ANJALEE KHEMLANI: And lastly, I want to ask you about something that you and I have sort of discussed on the side, which is all of this tends to impact the commercial programs. And so whenever Medicare comes up with ideas, whatever innovations come out there in terms of how it acts as a payer, tend to trickle down to the commercial side.

Do you see the overflow of that, including some of the drug pricing negotiations? Do you see that impacting in the long run? And what else do you think people should be aware of when it comes to how this trickles down?

MEENA SESHAMANI: That's a great question, Anjalee. Medicare is the nation's largest payer. We account for one in five health care dollars in this country, partner with a million clinicians, 6,000 hospitals. So absolutely, since 1965, Medicare has been leading the way in terms of affordability and access and equity issues. And that is something that I very much take to heart as we are thinking through our policies.

Specifically, you asked about the Inflation Reduction Act. The drug price negotiation is around Medicare. The Secretary selects 10 single source drugs for the first year, for Medicare, the negotiated prices for Medicare. We do, we'll be publishing that price for that transparency.

And I think one of the things, it's not just for drugs, but for all the things that we work on, we are bringing people together to have dialogue around how can and should care change. How should we be measuring quality? For example, we're aligning our quality metrics across all of our programs to really drive change there.

How can we bring people together to talk about the drug market? What's working, what isn't? And I think there's a lot of power in how we have that convening ability also to be able to create those conversations and bring interested parties together to really collectively drive change across the entire system.

ANJALEE KHEMLANI: Definitely something we all need to keep an eye on, because as we know, biggest line item for not just the government, but also employers. Thank you so much, Medicare Director Dr. Meena Seshamani.

MEENA SESHAMANI: Thank you again.