The Inflation Reduction Act could increase costs and reduce access for millions of seniors

Today, the U.S. Senate Committee on Finance held a hearing to discuss the Inflation Reduction Act’s changes to Medicare. Proponents of the administration’s government price-setting policies touted the savings the program will supposedly bring to seniors. But the reality is the Inflation Reduction Act (IRA) could increase costs and reduce access for millions of seniors. That’s the real headline. 

Some Medicare Part D patients are set to pay more for medicines in Medicare.

• A recent analysis found that 3.5 million Part D patients taking a medicine subject to a Maximum Fair Price under the IRA could see higher out-of-pocket costs in 2026. For those patients, they are expected to see an average increase in out-of-pocket costs of 14%. That increase will likely be higher for some demographic groups, including low-income individuals, minority communities and retirees in special plans like union workers.
• Premiums for standalone Part D plans went up 21% in 2024, and 1 million more low-income Medicare patients paying Part D premiums in 2024, as compared to 2023. CMS’ release of 2025 Part D premiums and plan information later this month likely will reveal that IRA is causing further Part D disruption for seniors.

Insurers plan to restrict access to vital treatments by increasing the use of burdensome access barriers.

• 89% of insurers and PBMs plan to reduce access to medicines in Medicare Part D through tools like step therapy and prior authorization or by excluding medicines from formularies. 
  78% of insurers plan to decrease the number of therapeutic options in classes with medicines selected for price setting.
• Looking at the number of Medicare patients taking the 10 medicines selected for price setting today, and those taking a therapeutic alternative, more than 10 million Medicare patients could face more access barriers. 

Despite misleading claims, the Part B inflation rebates aren’t lowering costs for most Part B patients.

• For patients covered under traditional Medicare taking Part B medicines, more than 99% will not experience out-of-pocket cost savings from the Part B inflation rebates.
• Only 5% of these patients took one or more of the medicines impacted by the inflation rebates in Q3 2024 because only about 10% of Part B medicines have been impacted at all. And those medicines that are impacted are largely not taken by many Part B patients.
• Plus, 90% of Part B patients have supplemental insurance that already covers most or all of their out-of-pocket costs.

On top of that, innovation for new treatments and cures is threatened. Several economic experts predict significant impacts in 10 to 20 years, with hundreds of medicines at risk of not being developed. The impacts will be felt for decades to come, and patients are the ones that will lose out.

And keep in mind: Previous data has shown that Medicare patients pay billions more for some medicines than insurers and PBMs. That’s because these middlemen get rebates and discounts on medicines, but force seniors to pay based on the full price. If policymakers are serious about helping Medicare patients better access and afford their medicines, they should require PBMs to share the savings with Medicare patients at the pharmacy. 

Learn more at PhRMA.org/IRA