- Late Wednesday, Sen. Joe Manchin, D-W.Va., announced he reached a deal with Senate Democrats to pass a bill that would extend boosted premiums granted by the American Rescue Act into 2025.
- The bill, a slimmed-down version of President Joe Biden’s Build Back Better package, also allows Medicare to negotiate select prescription drug prices beginning in 2026 and caps Medicare Part D out-of-pocket costs in 2025.
- The premium extension and Medicare negotiations are part of a more than $300 billion package that includes funding for climate and energy programs and a tax hike for corporations.
Roughly 13 million people with healthcare plans under the Affordable Care Act have avoided an anticipated premium increase after enhanced premiums, which attracted a record 14.5 million marketplace enrollees, were set to expire at the end of this year.
Manchin, who previously blocked efforts to pass the bill, said late Wednesday that he had reached an agreement with Democratic Majority Leader Chuck Schumer, D-N.Y., to pass the now-rebranded Inflation Reduction Act of 2022.
“Rather than risking more inflation with trillions in new spending, this bill will cut the inflation taxes Americans are paying, lower the cost of health insurance and prescription drugs, and ensure our country invests in the energy security and climate change solutions we need to remain a global superpower through innovation rather than elimination,” Manchin said in a statement.
Also included in the Inflation Reduction Act — a bid to lower drug prices. Medicare will be allowed to negotiate the prices of some 10 pharmaceutical drugs in 2026, 15 more drugs in 2027 and 2028 and 20 more in 2029. In addition to price negotiation, the bill also imposes penalizing rebates on pharmaceutical manufacturers who hike drug costs above the rate of inflation starting next year.
In more cost reliefs, Medicare Part D out-of-pocket spending will be capped at $2,000 in 2025. The bill also aims to broaden Part D low-income subsidies eligibility in 2024 and do away with the 5% Part D catastrophic threshold coinsurance requirement. The Kaiser Family Foundation estimates that 1.3 million Part D enrollees without low-income subsidies exceeded the roughly $6,000 catastrophic coverage threshold in 2020.
To pass the bill, Democrats are now relying on a fast-track maneuver dubbed budget reconciliation that enables highly prioritized fiscal bills to advance with a simple majority instead of 60 filibuster-breaking votes.