Inflation Reduction Act: Healthcare And Medicare

Last week, President Joe Biden signed into law the Inflation Reduction Act, which previously passed the House and Senate along party line votes. The sweeping package to combat climate change, lower health care costs, raise taxes, reduce the deficit, and provide significant new funding for National Parks and public lands contains several provisions of specific interest to RV manufacturers and suppliers.

So far, we have explained the tax changes and energy and climate provisions in the bill. Today, we are taking a look at the healthcare and Medicare provisions in the new law.

Medicare Drug Price Negotiation

The new law empowers Medicare to negotiate prices of certain costly medications purchased at the pharmacy or administered in a physician office. The Health and Human Services secretary will negotiate the prices of 10 drugs in 2026, and another 15 drugs in 2027 and again in 2028. The number would rise to 20 drugs a year for 2029 and beyond.

Inflation Cap

The legislation also imposes penalties on drug companies if they increase their drug prices faster than inflation, for Medicare drugs only.

Affordable Care Act Subsidies

The law extends the enhanced federal premium subsidies for Affordable Care Act coverage through 2025. This way, the subsidies will not expire just after the 2024 presidential election.

On Thursday, we will round out our analysis of the new law with a look at the outdoor recreation-related provision.