Will the Inflation Reduction Act impact your Medicare coverage and costs in 2023? Or will it benefit only a tiny portion of people on Medicare? Connie Health’s co-founder and CEO, Oded Eran, and co-founder and President, David Luna, discuss the legislation and what it means for you.
Watch the video or read the transcription below to learn more.
Oded Eran: Hi, everyone. Thank you for joining us. Today we’re going to talk about the Inflation Reduction Act. Is it impacting the lives of many seniors, or is this really good for only a subset of the population?
I’m Oded Eran, co-founder and CEO of Connie Health. With me is David Luna, co-founder and President of Connie Health. At Connie Health, we help older Americans save money and get better care. How are you, David?
David Luna: Hey, Oded.
Oded Eran: You’ve been doing this for dozens of years. You’ve been helping beneficiaries understand their Medicare. What are the top two or three parts of the Inflation Reduction Act that impact Medicare beneficiaries?
David Luna: Yes, thank you. And hello, everybody. Thank you for joining us.
Look, 2023 is going to bring about some changes. Right now, they’re looking at drug manufacturers paying rebates, reducing cost-sharing on insulins, and eliminating the cost-sharing for adult vaccines. Those are going to be the top three things that are going to affect people that are eligible for Medicare and that are currently on Medicare.
Oded Eran: So, let’s break it down. The high cost of insulin is something we hear from consumers all the time. And that was a hot topic in Washington. This is really a great step forward by the government.
David would love for you to talk a bit. What is the impact on beneficiaries? And then, we’ve also seen a lot of Medicare Advantage plans already cap the cost of insulin at $35. So it would be great if you talked a bit about what’s the difference between what the government is proposing to what some companies already do today.
David Luna: So, insulins. In all my years, I think that’s always been the number one complaint. It’s “I cannot afford my insulins.” And so. You typically see people who take one insulin. But you also have people that take three or four different medications.
And then recently, the pens came out, and so forth. And those are more expensive. New medications are being developed; those are even more expensive. So this new legislation is going to limit the cost of those medications to $35 a month.
Now let me be clear. You may be on a Medicare Advantage plan and currently paying $35 a month for your insulin. However, those Medicare Advantage plans are limited to a subset of insulins. Meaning they weren’t covering everything across the gamut. This legislation is going to cover insulins, in general, for $35 a month.
And it also includes things like Durable Medical Equipment (DME). So some of you may use the units either in your midsection or on your arm so that you can monitor your insulin by using your phone. So those were never covered. And now, you can have those for $35 a month.
Oded Eran: And so this is big news for people with diabetes and people taking insulin. What about the drug manufacturer rebates you mentioned? How is that going to work? And how much money is that going to be?
David Luna: That piece of legislation, in a nutshell, says if prices for drugs are increasing faster than the inflation, then Medicare beneficiaries will receive rebates from the drug manufacturers.
Now, honestly. Let me be real honest here. I don’t know how that’s going to work. I don’t know if there’s a check that’s going to be mailed to the beneficiary. Or if it’s going to end up somehow back in their Social Security checks. I do not know that. I know that these rebates will help these high-cost medications to at least remain level with inflation.
Oded Eran: Ya. We’ve all seen these charts of health care costs rising much faster than inflation. I think this is a good way to curb it. I’ll be honest. I always believe that pharma will find a way to gain the system and call it a new type of drug, so it’s not subject to that.
With that said. So, we’ve talked about the insulin that’s relevant to diabetics. This rebate sounds to me like it’s only relevant to a beneficiary who takes brand-name medication that is expensive and that has rapidly rising costs. I don’t think this is relevant to generic medicine, which we know is really cheap anyway. And what most Americans take.
One of the things that you said you were really excited about; is the vaccine coverage under the IRA (Inflation Reduction Act). That immediately. And I’ve been in the industry for quite a while. That caught even me a bit by surprise. Do you want to tell our viewers why that’s such a big deal?
David Luna: In this case, we’re talking about, let’s say, for example, the shingles vaccine. The shingles vaccines, in general, were not covered through Medicare. And now Medicare is going to eliminate that cost for these shingle shots and, of course, other vaccines.
And so, I think, again, the focus here with the three things that we’re discussing is; how do we keep people healthy at a lower cost? How do we say you have access to medications that you need and medications that will prevent any type of future type of condition?
So I really like the fact that the federal government is starting to get involved and saying we need to give people access to their medication. Again, not everybody is fortunate enough to be able to afford these things. And so, you know, we’re moving in the right direction when it comes to helping customers access the care that they need.
Oded Eran: That is indeed great news. So, those are, again, the top three. We’ve talked about insulin, we talked about drug manufacturer rebates for high-cost drugs that are spiraling out of control, we talked about vaccines.
Those are all great. But, between us. And really important to tell the viewers that these cost reductions are relevant for probably a small subset of the population.
So, if you are not a diabetic, if you’re not taking brand-name medication, and you’re not in need of these vaccines. Again, because we’re not talking about flu shots or talking about COVID shots, those are covered by Medicare at no cost. You’re not, like, not to dawg on the Inflation Reduction Act. You, as a Medicare beneficiary, are not benefiting from these measures.
David Luna: Yeah, I think, you know, in general, Oded, you know, the prescription drug plans. Or the Medicare Advantage plans out there that include drug coverage. They’re put together so well, right?
The medications really don’t come into play until exactly what you said. You’re either taking insulins, you know, whatever way you administer it. Now, everyone is trying to administer their insulin through a pen injection, or they have the unit I mentioned earlier that goes on your arm on your midsection. Those can become expensive. But then you’ve got the expensive brand-name drugs. You know, those are the only people that are going to be affected, right?
Oded Eran: You actually make a really good point. At Connie, we talk a lot to customers and put them on $0 Medicare Advantage HMO plans. And those plans will limit your out-of-pocket expenses dramatically if you’re not taking any brand-name medication.
Always, when we talk to customers, like when are you going to incur really high costs? If you’re prescribed an expensive brand-name medication. Or you have some sort of critical illness. And the critical illness is probably, it’s typically capped through the maximum out-of-pocket. You’ll really start paying thousands and thousands of dollars if you are on one of these drugs.
So I think you make a good point about what the government is doing. While a lot of people will actually not benefit. It’s the people who need it the most who will actually really benefit from this. So that is a really good point, David.
David, thank you so much. If you like this episode, please like and share Connie Health and this video. And we’re Connie Health. We help older Americans save money and get better care by helping them access the best insurance plans and the right doctors. And we do it always through local advisors that can meet you in the comfort of your home – and over the phone. And can help you navigate your healthcare journey. Thank you so much. See you next time.
David Luna: Thank you.
Read more by David Luna
I am a Spanish-speaking Arizona Life and Health Insurance Licensed Agent and have been helping people with Medicare since 2005. I am a Marine Corps Veteran & former police officer. I enjoy watching football and basketball but hold family time in the highest regard.