AUG 25, 2022
On August 16, 2022, President Biden signed the “Inflation Reduction Act” into law. The legislation includes key health care, tax, and climate change components.
As it relates to health care, the bill:
It should be noted that the pricing negotiated by the government, as well as the rebates, are not available to commercial plans (including employer-sponsored health plans). Because of this, and with the additions of the new cap on insulin and the upcoming hard cap on Medicare Part D out-of-pocket cost, there could be a cost-shifting by the pharmaceutical manufacturers and/or pharmacy benefit managers to the commercial marketplace.
If offering an HDHP with an HSA, the law codifies the ability of a plan to provide first dollar coverage for insulin without jeopardizing an individual’s ability to make HSA contributions.
Employers should stay informed as to the impact on prescription drug costs in the commercial market as a result of the federal government new negotiation power. While this will not take effect until 2026, it will be important to watch the costs in this area.
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