Building on recent progress with drug pricing, last night Senate Democrats announced plans to add energy and tax provisions to the reconciliation package, and to hold a vote next week.

Critically, the expanded bill, the Inflation Reduction Act of 2022, maintains key Medicare and prescription drug reforms that were included in the most recent agreement:

• Allows Medicare to negotiate directly for the price of some Part D and Part B drugs, beginning in 2023.
• Caps beneficiary out-of-pocket Part D drug costs at $2,000 per year. This protection includes a “smoothing” mechanism to give beneficiaries the option to break that amount into monthly payments.
• Expands access to the Part D low-income subsidy program (LIS). Currently, full LIS assistance is limited to those earning up to 135% of poverty—about $18,000 a year in 2022. It is only partially available to those earning less than 150% of poverty, leaving many people in this category exposed to high premium and prescription drug costs. The bill extends full LIS benefits to this group.
• Institutes a new “inflation rebate” that requires drug companies to rebate back the difference to Medicare if they raise prices higher than inflation.
• Restructures Part D financial obligations to better incentivize manufacturers and insurers to control high and rising drug prices.
• Eliminates cost sharing for adult vaccines covered under Medicare Part D.

Medicare Rights strongly supports these critical reforms. Together, they would achieve historic coverage and affordability gains, better ensuring that all people with Medicare have meaningful access to care. We applaud lawmakers for prioritizing these much-needed solutions and urge prompt passage, as well as continued work to strengthen Medicaid Home- and Community-Based Services (HCBS) and to allow Medicare Part B to cover comprehensive vision, dental, and hearing services.

For more information on the Inflation Reduction Act of 2022, please see the legislative text and the following summaries from Senate Democrats:

• Inflation Reduction Act – One Page Summary
• Tax Summary
• Prescription Drugs Summary
• Energy Security and Climate Change Investments Summary