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Inflation Reduction Act Contains a Number of Health Reforms

Monday, August 29, 2022
Inflation Reduction Act Contains a Number of Health Reforms

On Aug. 16, 2022, President Joe Biden signed the Inflation Reduction Act into law, aimed primarily at fighting inflation and reducing carbon emissions. It also contains a number of reforms that will impact health coverage.

The health reforms included in the law have staggered effective dates and will be implemented over the next several years.

Overview of the New Health Reforms

The law’s health reforms primarily impact those with Medicare coverage. Specifically, the law implements the following measures:

  • It allows the Secretary of Health and Human Services to negotiate the prices of certain Medicare drugs each year. The negotiations will take effect in 2026 for 10 drugs covered by Medicare, increasing to 20 drugs in 2029.
  • Beginning in 2023, the cost of insulin will be capped at $35 per month for people with diabetes enrolled in Medicare.
  • Beginning in 2025, out-of-pocket prescription drug costs will be capped at $2,000 per year for Medicare beneficiaries.
  • The law also implements a three-year extension on increased health insurance subsidies for coverage purchased through an Exchange.

These enhanced subsidies were originally provided as part of the American Rescue Plan Act, a COVID-19 relief bill, and were set to expire at the end of 2022.

Effective Dates


Enhanced Exchange subsidies are extended for three years.


The monthly cost of insulin is capped at $35 for Medicare enrollees.


Out-of-pocket prescription drug costs for Medicare enrollees are capped at $2,000 annually.


Negotiations for certain prescription drug costs begin.

Material posted on this website is for informational purposes only and does not constitute a legal opinion or medical advice. Contact your legal representative or medical professional for information specific to your legal or medical needs.