Montana seniors applaud drug pricing elements of Inflation Reduction Act

Montana Sen. Jon Tester stopped in Great Falls Monday to tout the expanded Medicare provisions of the recently passed Inflation Reduction Act of 2022. In doing so the Senator highlighted the political muscle of senior voters who support its provisions, both in Montana and across the United States.

“We’ve heard time and time again from politicians, policy makers talking about making prescription drugs more affordable, but until a few weeks ago it was just talk,” Tester told a small gathering at the Alluvion Health Medical Center in downtown Great Falls. “The reason for that is because the policy makers were listening to the wrong people. They were taking their marching orders from somebody other than the people that are sitting in this room, somebody other than Montanans.”

Little more than two weeks ago President Biden signed into law the $430 billion Inflation Reduction Act of 2022. The Act passed both Houses of Congress on a strictly party line vote with the White House asserting it will lower healthcare costs and encourage investment in clean energy technology without increasing budget deficits or taxes on families making less than $400,000 a year. The Inflation Reduction Act imposes a new minimum 15% tax on corporations making more than $1 billion a year and includes $80 billion in additional funding for the Internal Revenue Service (IRS) to help the agency crack down on wealthy tax evaders.

Senate Republicans have characterized the Inflation Reduction Act as “reckless tax and spend legislation.”

“As Montanans continue to struggle with sky-high prices on everything from gas to groceries to housing, every single Senate Democrat voted to raise energy costs, give taxpayer dollars to the rich for electric vehicles, increase taxes and supersize the IRS to go after small businesses and families,” said Sen. Steve Daines (R-Mont.) following the Aug. 12 Senate passage of the bill. “It’s a slap in the face to Montana families.”

In his speech on Monday, Tester steered clear of the more controversial clean energy provisions of the Act, focusing instead upon caps in prescription drug prices for Medicare recipients.

“With the Inflation Reduction Act, we’re holding the big pharmaceutical companies accountable,” Tester said. “We’re cutting healthcare costs for Montanans with common sense steps like requiring Medicare to use its purchasing power to negotiate fair prescription drug prices of seniors. Allowing Medicare to negotiate prescription drugs prices means that multinational pharmaceutical companies won’t be able to set the prices, and our seniors won’t have to eat it.”

“We also capped out-of-pocket prescription drug costs for Medicare patients at $2,000 per year,” Tester added. “Finally, insulin costs for Medicare patients were capped at $35 per month. The nice thing about this bill is that it doesn’t raise taxes on any Montanan and will ultimately put more money back in your pocket. We did this by making folks pay their fair share, particularly corporations … making billions and paying zero in taxes. That will change.”

Tester’s endorsement of the Inflation Reduction Act was echoed by Nancy Andersen, Outreach Director for the Montana Chapter of the American Association of Retired Persons. Nationally, AARP claims more than 38 million members, a figure that includes 135,000 members in Montana.

“For decades Medicare has been legally prohibited from using its buying power to negotiate for lower drug prices, and up until now the pharmaceutical industry has been successful at keeping that prohibition in place,” Andersen said. “This new law includes many key AARP priorities that will save taxpayers and Medicare billions of dollars including, finally allowing Medicare to negotiate the price of prescription drugs, giving people in Medicare drug plans peace of mind knowing they won’t have to pay more than $2,000 a year for their medications, penalizing drug companies for raising their prices higher than the rate of inflation, limiting the cost of insulin to $35 a month for people on Medicare, and making many vaccines such as for shingles available at no cost to Medicare.”

“This law will also help keep health insurance affordable for millions of Americans who qualify for expanded financial assistance and will prevent a massive premium increase that would have affected nearly three million people,” she added. “This is so important for the AARP, especially for members who are age 50 to 64 who already pay up to three times more for their coverage than younger people. This is an enormous victory, but the fight is not over. Big drug companies will spend millions trying to overturn this new law so they can keep charging Americans the highest prices in the world. AARP will keep fighting big drug companies’ out-of-control prices, and we won’t back down.”

Speaking on behalf of the senior’s advocacy organization Big Sky 55+, former Great Falls City Commissioner Bill Bronson noted that roughly 60 million aging Americans currently depend upon Medicare for healthcare benefits, and that among those about 46 million have prescription drug coverage through the Medicare Part B program.

“We may be old, but we’re cranky and we vote,” Bronson said pointedly of the senior population’s political muscle.

Bronson referenced how a prior version of the Inflation Reduction Act extended price caps on prescription medications to all low-income Americans, not just those covered under Medicare Part B. That provision was stripped out of the bill’s final version.

“It’s taken us decades to get to the point where we are today,” Bronson said. “In many instances it has been a bipartisan effort, but there are still those who do not believe in the good works that we can do with this type of program. I urge Sen. Tester on behalf of this organization (Big Sky 55+) and others to keep up the fight to make sure that cap applies to everybody who needs that type of care in our system.”

Tester acknowledged that seniors will be the first to see significant improvements in healthcare benefits but argued that the Act’s impact will eventually trickle out to lower healthcare costs for all Americans.

“If Medicare is negotiating prices for our seniors its going to lower prescription drug costs for everybody across the board,” Tester said. “Do we need to do some things to make healthcare more affordable – absolutely and unequivocally, but I think this is a step in the right direction. I’m proud to stand by this law and I appreciate the support of the folks who made this happen.”

While some of the provisions within the Inflation Reduction Act will take effect early next year, most of the drug pricing caps will take longer. The provision capping insulin costs at $35 a month for Medicare patients won’t take effect until 2023. That’s also when the federal government will begin forcing pharmaceutical companies to pay a rebate if they raise drug prices faster than the rate of inflation.

The $2,000 cap on annual drug costs for Medicare Part B enrollees won’t begin until 2025, and the provision allowing Medicare to negotiate drug prices won’t come into effect until 2026 – well after the next Presidential election and a likely 2024 run by Tester for a fourth term as U.S. Senator.