What is in and out of the Inflation Reduction Act for healthcare

U.S. Sen. Jon Ossoff, D-Ga., speaks with supporters after an event at Henry H. Brigham Senior Services Center in Augusta on Monday, Aug. 15, 2022.
U.S. Sen. Jon Ossoff, D-Ga., speaks with supporters after an event at Henry H. Brigham Senior Services Center in Augusta on Monday, Aug. 15, 2022.
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President Joe Biden on Tuesday signed one of the largest pieces of legislation of his administration – the Inflation Reduction Act.

The law has a lot of moving parts, but in particular it has several provisions related to healthcare, including several that Georgia's senators had a hand in writing.

Among other things, the law will:

  • Cap the cost of insulin for those on Medicare at $35 a month;

  • Cap annual prescription costs for those on Medicare at $2,000 annually;

  • Extends health insurance subsidies passed as part of the pandemic recovery American Rescue Plan;

  • Allows Medicare to negotiate the price of some drugs starting in 2026; and,

  • Provide free vaccinations through Medicare.

According to a study from Kaiser Family Health, about 45,000 Georgians on Medicare spend more than $2,000 annually on drugs out of pocket, and about 112,000 would qualify for free vaccines.

Sens. Raphael Warnock and Jon Ossoff, both Georgia Democrats, claimed victory, especially for the first two provisions.

"It's a pleasure to be here with good news for you, really good news," said Ossoff during a stop in Augusta on Monday to tout the insulin price cap. "And not good news like just an idea, not ... good news like a bill I introduced, but legislation that we have passed and which I've just learned the president will sign into law tomorrow."

U.S. Sen. Jon Ossoff, D-Ga., speaks to media after an event at Henry H. Brigham Senior Services Center in Augusta on Monday, Aug. 15, 2022.
U.S. Sen. Jon Ossoff, D-Ga., speaks to media after an event at Henry H. Brigham Senior Services Center in Augusta on Monday, Aug. 15, 2022.

Insulin costs reduced for some

But both Senators failed to get some provisions through that they had advocated for, including a bill Warnock introduced to cap all insulin costs at $35 per month.

Shortly before the Senate vote, the Senate parliamentarian — who rules on whether the Senate is following its own procedures — decided that capping insulin costs through private insurance was not allowable under the reconciliation process, which Senate Democrats used to pass the Inflation Reduction Act without a Republican filibuster.

Georgia: High rates of diabetes – and high costs. Proposed legislation would cap prices

Related: 'Pure capitalism': Republicans nix insulin price caps on private insurance in blow to Democrats

FILE - U.S. Sen. Raphael Warnock talks with reporters outside Fort Gordon after touring the facility near Augusta, Ga., Monday morning, March 29, 2021.
FILE - U.S. Sen. Raphael Warnock talks with reporters outside Fort Gordon after touring the facility near Augusta, Ga., Monday morning, March 29, 2021.

Speaking before the Senate vote to the USA Today Network in Georgia, Warnock said he supported the bill.

"This is an amazing piece of legislation, and I support it wholeheartedly," he said. "It deals with rising healthcare costs by capping the cost of prescription drugs, capping the cost of insulin, it addresses climate change for the existential threat that it is, all the while reducing the deficit."

Warnock anticipated that the parliamentarian might rule against his provision, but said he hoped Republicans would help it pass anyway. Instead, they voted it down.

Republican disapproval

In the House, the law passed by a strict party line vote, with every Democrat voting for the bill and every Republican voting against it.

Buddy Carter, the Republican congressman who represents Savannah, objected to the drug pricing provisions among other aspects of the bill.

U.S. Rep. Buddy Carter
U.S. Rep. Buddy Carter

"This is one of the worst things that could possibly happen to research and development here in America," Carter was quoted as saying in a statement. "As a pharmacist, I can tell you, that's my biggest fear. ... I am very concerned about this prescription drug pricing they're trying to pass here. This is not the way that we should do it."

Rep. Rick Allen, R-Augusta, had similarly harsh things to say about the bill.

“The so-called ‘Inflation Reduction Act’ is another bloated Democrat spending bill that will raise taxes at the worst possible time – during a recession," Allen said in a news release.

Allen's office mostly highlighted the economic and environmental provisions in the bill, but also raised the point that drug pricing would stifle innovation.

The Congressional Budget Office estimates that over 30 years, about 15 out of 1,300 new drugs would not make it to market because of the changes to pricing.

Medicaid expansion fails

Also before the vote, Warnock proposed extending tax credits for health insurance to those below the poverty line. A previous program from the Georgia senators to create a federal workaround for states like Georgia that have not expanded Medicaid had died previously.

Currently tax credits are only available to people making more than 100% of the federal poverty line. In most states, people are eligible for Medicaid coverage up to 138% of the poverty line, but in Georgia and 11 other states Medicaid has not been expanded to cover all of those residents.

In Georgia, only children under 19, low-income parents of those children, pregnant Georgians, and those on Social Security Disability are eligible for Medicaid.

More: Warnock: Inflation bill could extend tax credits to close healthcare gap in Georgia

On Monday, Ossoff said he will continue to work to expand Medicaid coverage, but that he also hopes the state will choose to expand Medicaid on its own.

The Georgia state legislature previously proposed an expansion of Medicaid. It made everyone under the federal poverty line eligible, but added a work requirement. That caveat required a federal waiver, which the Trump administration approved. The Biden administration later turned it down.

This article originally appeared on Augusta Chronicle: Inflation Reduction Act cuts drug prices for some, not others