Calling it “one of the most significant laws in our history,” President Joe Biden signed the Inflation Reduction Act (IRA), making profound advances in addressing climate challenges, tax inequity, and health care affordability. The IRA will have implications for millions of Americans and its effect is already being felt in Washington state. Among its most important provisions is the extension of the no-cost and capped health insurance premiums made possible by the American Rescue Plan Act (ARPA). Rather than expiring at the end of this year, the reduced premiums will continue through 2025, saving an average of $800 per person for 13 million people nationwide. 

The IRA adds substantial consumer improvements to Medicare that were decades in the making, including a $2,000 limit on annual out-of-pocket prescription costs for Medicare Part D enrollees and a cap on insulin costs at $35 a month. In addition, the IRA enables the federal government to negotiate Medicare drug prices, starting at 10 drugs in 2026, but with incremental increases to 60 drugs by 2029; mandates a rebate for manufacturers that raise prices higher than inflation starting in 2023 for Medicare Parts B and D; and shifts the burden of the drug expenses over the out-of-pocket limit away from Medicare (from 80% to 20%) and places it on the plans (60%) and manufacturers (20%). 

The repercussions of the IRA are already being felt in Washington state. In May, 14 issuers had proposed a 7.16% average increase for the individual health insurance market in 2023, ranging from 4.52% to 16.1%. These rate filings are currently under review by the OIC. Earlier this week, the OIC asked health insurance companies to revise their proposed rates, considering the effect of having “more, presumably healthier, people receiving subsidies due to the passage of the IRA in addition to the Washington State’s Cascade Care Savings subsidies”  Alternatively, they must provide an explanation as to why their morbidity risk would not be lower. The deadline for issuers to respond is August 22nd, in order for the OIC to complete its review by September 8th in anticipation of the Washington Health Benefit Exchange rate review meeting on September 15th. We hope that revisions will result in lower premium increases than earlier proposed.

Recognizing the importance of the IRA when it was pending in Congress, NoHLA submitted a letter urging Washington’s delegation to support it. While we applaud its passage, there remains much work to be done to address health care access needs. Many health care-related improvements that were in earlier drafts were not included in the scaled-down version that passed. The law did not add dental, hearing, or vision benefits to Medicare, bolster access to long-term services and supports, or include improvements to Medicaid and other programs. Sadly, the law did not close the Medicaid gap for states that have so far failed to expand Medicaid eligibility to 133% of the Federal Poverty Level as provided by the Affordable Care Act, which has created long-term inequity for low-income residents in those states.