By Trish Pearson
Insuring Your Future
Trish Pearson
Even though it still feels like summer, January is around the corner, with about 90 shopping days till Christmas.
Over the summer, Congress and the state legislature were busy introducing new laws and regulations that impact health insurance plans. There has been a lot of publicity of late regarding prescription drug costs, minimum coverage requirements and the cost of individual health insurance.
Here’s what’s been happening while we were enjoying summer. Spoiler alert: many of these changes will not go into effect until 2024 or later.
The Inflation Reduction Act for the first time authorizes Medicare to negotiate the prices of some high-cost prescription drugs with pharmaceutical companies. They can begin to negotiate in 2023 for prices that will go into effect in 2026. There will be tax penalties on drugmakers that increase product prices by more than the rate of inflation.
Changes that will go into effect in January 2023 include making most vaccines free under Medicare. The cost of insulin for all ages will be capped at $35 per month and will include insulin pumps. Not only will this reduce the price at the counter; it will also keep many Medicare beneficiaries out of the “doughnut hole” or gap. The income threshold to qualify for Part D assistance (prescriptions under Medicare) will increase. We are awaiting direction from the Connecticut Department of Social Services on how this will impact their income guidelines.
The increase in the cost of prescription drugs, including drugs administered in a doctor’s office, will be limited to the rate of inflation. This means that the drug company cannot raise the price overnight in response to increased demand. Finally, Part D prescription drug plan premiums cannot increase more than 6 percent a year through at least 2029.
In January 2025, the law will limit the annual out-of-pocket costs for prescriptions to $2,000 per individual.
The law authorizes the Health and Human Services secretary to begin negotiating the prices of 10 high-cost prescription drugs, which will go into effect in 2026.
In 2028, the negotiated drugs covered under Medicare Part B will be limited by the IRA. The number of drugs whose prices will be negotiated on behalf of Medicare will increase in subsequent years, and by 2029 a total of 60 drugs will be subject to negotiated prices.
For people who buy their health insurance through the health exchanges, the bill extends through 2025 the expanded advanced premium tax credits that reduce monthly premiums. For those 50 to 64 years old, these subsidies provide an average savings of over $950 annually, and all consumers will continue to pay no more than 8.5 percent of their income for ACA health insurance premiums. The Insurance Commission issued a decision that limited increases on individual plans to 15 percent and small group plans to 7 percent. This is good news when considering that the insurance companies requested rate increases as high as 24 percent.
The outlook for health insurance options in 2023 is good – so go ahead and start your holiday shopping now.
Trish Pearson is a licensed independent insurance agent and certified long term care specialist. Contact her at 203-640-5969 or trishpearson281@gmail.com.