Frederica Freyberg:

Democrats hail the Inflation Reduction Act as life changing legislation. Congressional Republicans all voted against it calling it reckless spending. But it’s now law and the healthcare previsions will cap prescription drug costs for nearly 900,000 people on Medicare in Wisconsin as well as extend pandemic assistance subsidies for more than 200,000 people in the state on marketplace health plans. Bobby Peterson is executive director of ABC for Health, a non-profit public interest law firm that helps healthcare consumers navigate the programs. And Bobby, thanks very much for being here.

Bobby Peterson:

Glad to be here, Fred.

Frederica Freyberg:

So, specific to people on Medicare, the law caps prescription drug costs at $2,000 a year. It also caps insulin at $35 a month for nearly 60,000 on Medicare in Wisconsin who use that drug. How big of a change is this?

Bobby Peterson:

It’s a big change. I think it helps to reduce some of the costs people are facing. I think it’s important to remember, though, that nothing in healthcare is simple, and nothing in the Inflation Reduction Act with healthcare is simple either. So it’s important that we distinguish that this is primarily going to be helping people that have Medicare Part D coverage. So that’s a subset of Medicare folks. It’s going to be old folks getting Medicare Part D, and a lot of these changes don’t unfold for a couple of years or so. The $2,000 cap does not start until 2025.

Frederica Freyberg:

Right, so don’t expect that kind of relief really any time soon. But prior to this taking effect over the next few years, how are older people on a fixed income even able to afford the out-of-pocket costs of prescriptions?

Bobby Peterson:

Well, it’s always a struggle and it’s always, you know, family meetings with, you know, kids, parents, grandparents, trying to figure out how can we make this work. This is going to make the process a little bit easier, but it’s still complex. There will still be those family meetings trying to understand the changes that are coming. The opportunities to get some additional assistance I think is really important. I would encourage families, you know, working together to work with your local aging and disability resource center because they can, you know, it’s different — there are so many nuances, it’s good to have that local level of assistance and the aging and disability resource centers in the county can help you. You also might want to get some help from the Part D help line, which is a statewide 800 number run by the folks over at Disability Rights Wisconsin. That number is 800-926-4862. And they also can help you with some of the questions that emerge, because it’s going to be a little bit different for all the folks out there. We didn’t get a chance to talk about the insulin, which is a big deal, because that was a huge price gouging — another example of free market healthcare where it’s not free market if there are just three people controlling the process and raising prices because people need it to live. So, that’s a big deal for people that are insulin-dependent on Medicare Part D again. That’s going to be important. That one starts right away in 2023, so that’s important for people that need insulin because it was really getting bad.

Frederica Freyberg:

Another prong of the law would allow the feds to negotiate drug prices. Is that meaningful?

Bobby Peterson:

Absolutely. I think when you think about folks that advocate for free market healthcare, you know, negotiation and opportunities to leverage pricing is always a part of that, and forever the federal government has had their hands tied behind their back in terms of negotiating prices with the pharmaceutical industry. This lets the government use its size to an advantage to say we are going to be negotiating these prices and trying to get the best deal for our Medicare recipients. After all, these costs are sometimes borne by the recipients or it’s out of the trust fund so it’s important to make sure we get the best deal and allowing with the federal government to negotiate is really an important feature of the bill. Again, it not going to happen right away. This is a slow unwinding of this process. Nothing is going to happen for several years before the federal government starts a slow process of negotiating with ten drugs and it ramps up through 2030.

Frederica Freyberg:

So aside from folks on Medicare, the law extends expanded premium tax credits for people on Affordable Care Act marketplace plans. There were extra subsidies that were supposed to go away after 2022. Break that down for us. What will that extension mean?

Bobby Peterson:

Yeah, that’s going to be a really big deal for middle income folks that were facing a potential benefits cliff who were not going to be eligible for advanced premium tax credits anymore after the open enrollment and now that’s extended. That’s really great news. One of the remarkable things that’s happened is we have lowered the overall rate of people that lack health insurance in this country to 8%. It’s never been that low. So this model of getting as many people covered as possible is really important because that benefits us all. The tax subsidies are going to extend coverage to more people, more benefits, and it will encourage people to maintain their health insurance coverage, which is really a good thing so that we are all covered and we are getting the services we need and deserve.

Frederica Freyberg:

All right. Bobby Peterson, thank you. Thank you for your work.

Bobby Peterson:

Thank you. Glad to help.