Biden administration: Legislation will prevent large health care costs increases for many in Tennessee, Georgia

Photo courtesy of Getty Images
Photo courtesy of Getty Images

NASHVILLE -- Biden administration officials say hundreds of thousands of Tennessee and Georgia seniors on Medicare will avoid large increases in health care costs starting next year after sprawling legislation that extends subsidies for insurance policies for three years and caps insulin costs at $35 per month was signed into law last week.

Medicare recipients can expect more savings under another provision that allows the federal health care program for the first time to negotiate prices with pharmaceutical companies on some of their most expensive drugs starting in 2026.

Other provisions in the $740 billion Inflation Reduction Act require Medicare Part D drug plans to begin offering improved financial protections against catastrophic costs starting in 2024, with a $2,000 out-of-pocket cap for enrollees taking effect in 2025. That alone will benefit about 37,000 Tennesseans and some 46,000 Georgians, according to estimates by the Kaiser Family Foundation.

Starting in 2023, the legislation will require zero cost-sharing for vaccines for Medicare Part D beneficiaries. While Medicare Part B covers vaccines such as the flu vaccine at no cost-sharing, patients receiving vaccines covered under Medicare Part D, such as the vaccine for shingles, must pay for a portion of the cost out of pocket. That ends starting in 2023 for Medicare Part D beneficiaries, according to a Department of Health and Human Services fact sheet.

Some 69,000 Tennessee Medicare beneficiaries received a Part D vaccine in 2020, and that number is likely to rise as those vaccines become more affordable, according to the Biden administration. An estimated 113,000 Georgia Medicare beneficiaries received a Part D vaccine in 2020.

The legislation also goes well beyond health care. It includes a 15% minimum tax on large corporations as well as a scaled-down version of President Joe Biden's original plan to rebuild infrastructure and invest in efforts to combat climate change. New spending accounts for $440 billion while, another $300 billion is directed at at reducing the federal deficit over the next decade.

A provision that sought to lower prescription drug costs for Americans on private insurance plans failed to gain required approval from the Senate parliamentarian, necessary under the bill reconciliation process. So the requirement only applies to drug prices for Medicare beneficiaries, the news site Vox reported.

'Historic' advance vs. 'Build Back Broke'

According to the Kaiser Family Foundation, there were some 1.4 million Tennesseans who had Medicare coverage in 2020. Of that figure, 796,822 had traditional Medicare Part A, B and D plans, while another 588,431 were enrolled in a Medicare Advantage plan.

Advantage plans provide Medicare benefits through a private-sector health insurer, which often offers additional benefits in exchange for utilizing a narrower range of providers to control costs. Most of the changes apply to traditional Medicare coverage.

Biden's signing of the measure into law broke along usual partisan fault lines.

"It's an historic piece of legislation, and people will soon learn exactly what it means to them," U.S. Health and Human Services Secretary Xavier Becerra told reporters Thursday during a Zoom call. "President Biden made a commitment, lowering costs for more people with better care when it came to health care."

Georgia Democratic U.S. Sens. Raphael Warnock and Jon Ossoff voted for the legislation. Tennessee Republican U.S. Sens. Marsha Blackburn and Bill Hagerty voted no.

Earlier this year, Warnock introduced the Affordable Insulin Act Now to cap costs of the drug used by diabetics to control blood sugar levels at $35 a month.

"We fought to include it in the Inflation Reduction Act, and we won that fight," Warnock tweeted earlier this week. On Friday, the senator added in another tweet that "Georgia seniors pay too much for the Rx drugs they need to live. Glad we've helped ease that burden by capping drug costs for seniors on Medicare!"

Blackburn attacked the legislation earlier last week as Biden signed it into law.

"The IRS is about to grow by 87,000, thanks to the Dems' radical spending bill," Blackburn tweeted, criticizing a provision that provided additional funding to the IRS. "That's 87,000 reasons to FIRE Democrats in November. #RedWave."

Writing in her weekly newsletter Friday, Blackburn again hit the law.

"As Tennesseans are facing record-high inflation and a recession caused by out-of-control spending, President Biden signed the $739 billion Build Back Broke plan into law. Despite what those in Washington want you to think, this bill will not reduce inflation. It will not ease your financial burden at the gas pump or grocery store. It will not improve our economy."

Dr. Everlena Holmes, founder of the Hamilton County Voters Coalition, said she was glad those who worked on the bill were able to negotiate drug prices.

Before retiring and returning to Chattanooga, Holmes had a long career in health, serving as dean of health science at Hunter College at the City University of New York system. She also served as a dean at the Charles R. Drew University of Medicine and Science in Los Angeles as well as holding similar positions elsewhere across the U.S.

Holmes said she uses a Medicare Advantage Plan that includes low-cost drug coverage (Part D). Those Medicare plans provide protection in exchange for restricting their network of providers. She said she often gets prescriptions for as little as $1. She advises enrollees to explore the Medicare Advantage Plans, which are known as Part C plans.

The activist also said she favors the provision allowing Medicare to negotiate with pharmaceutical companies on high-cost drugs.

The Biden administration has said the law will reduce health insurance premiums for hundreds of thousands of Tennesseans on average by about $720 a year while expanding coverage to some 56,000 state residents.

The administration also argues that for the first time, all 1.1 million Tennesseans with Medicare Part D coverage as well as 1.3 million Georgians with it will rest easier knowing the drug price caps are in place.

Pfizer CEO Albert Bourla, however, had raised concerns about the legislation as it sped through Congress, The Intercept reported earlier this month.

The legislation includes "specific measures to affect only the pharma industry, particularly when we are out of a pandemic, where this industry has proven the value that it brings to public health and to the global economy," Bourla said during a call with investors in late July, according to The Intercept.

In a PBS interview earlier this month, Stacie Dusetzina, associate professor of health policy at Vanderbilt University School of Medicine, said allowing Medicare to negotiate with drug companies represents a "modest start.

"But I think you have to put it in context of the fact that when the Medicare Part D program was first devised, they were banned explicitly from negotiating for drug prices," Dusetzina said. "So this is a huge step towards bringing drug price negotiation into the program for the first time."

Contact Andy Sher at Follow him on Twitter @AndySher1.