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On the Hill: Biden Signs Inflation Reduction Act

After nearly a year of negotiations, Democrats achieved their goal of passing a sweeping “human infrastructure” funding bill with House approval Aug. 12 of the Senate-passed Inflation Reduction Act of 2022 in a 220-207, party-line vote. President Joe Biden signed the bill today.

In a statement, America’s Essential Hospitals applauded the law for preserving access to health care coverage but expressed disappointment it did not include funding relief for hospitals to overcome workforce shortages and other challenges of the COVID-19 pandemic.

The Inflation Reduction Act is a pared-down version of the Democrat’s expansive and more costly Build Back Better Act, which ultimately could not gain enough support, even under the Senate reconciliation procedure. After months of negotiations, Senate Majority Leader Chuck Schumer (D-N.Y.) clinched the necessary support of Sens. Joe Manchin (D-W.V.) and Kyrsten Sinema (D-Ariz.) to pass the bill in the Senate.

Of particular interest to essential hospitals, the law extends Affordable Care Act subsidies through 2025. Other notable provisions include those that will:

  • establish a Medicare Drug Price Negotiation Program, which directs the secretary of health and human services to negotiate maximum fair prices for select drugs for the Medicare program, beginning with 10 drugs in 2026, up to 15 additional drugs in 2027 and 2028, and up to 20 additional drugs annually in 2029 and beyond;
  • require drug manufacturers to pay a rebate to the Federal Supplementary Medical Insurance Trust Fund for Part B and Part D drugs should they increase prices faster than inflation. In a change required by the Senate parliamentarian, the final bill omitted language that would have extended this provision to commercial health insurance plans; instead, it would apply only to Medicare;
  • cap the monthly cost of insulin furnished under Medicare Part D and remove deductibles and reduce coinsurance for insulin provided through durable medical equipment in Medicare Part B;
  • establish a $2,000, out-of-pocket cap on payments under Medicare Part D and Medicare Advantage Part D (MA-PD) plans in 2025 and beyond;
  • improve access to adult vaccines under Medicare and Medicaid; and
  • expand eligibility for low-income subsidies under Part D of the Medicare Program from 135 percent of the federal poverty line (FPL) to 150 percent, beginning Jan. 1, 2024.

Congressional Schedule

Both chambers of Congress will remain in a district work period through Sept. 5.

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About the Author

Christina Fagnano is the legislative affairs associate at America's Essential Hospitals.

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