The Washington Report
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August 17, 2022
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While we do our best to provide timely updates, it is possible that the information shared in the newsletter may change after our publication deadline.
Executive/Legislative
President Biden Signs Inflation Reduction Act Into Law
On August 16, 2022, President Biden signed the Inflation Reduction Act (H.R. 5376) into law. The House approved the legislation on August 12 and the Senate passed the bill on August 7. Among other items, the bill addresses health, tax, climate change, and clean energy issues. The legislation includes provisions for Medicare to negotiate prescription drug costs on certain medications and cap Medicare out-of-pocket drug prices for seniors at $2,000. The bill will also extend Affordable Care Act premium subsidies through 2025, thus avoiding a potential increase for enrollees in January 2023. For additional details regarding health provisions, please refer to the Aon bulletin Congress Passes Inflation Reduction Act of 2022, in the Publications section of this newsletter.
The full text of H.R. 5376 is available here.
Congress Adjourned for August Recess
The House and Senate are adjourned for the month of August, tentatively scheduled to return after the Labor Day holiday. (Please be aware that the congressional calendar can change at any time due to current events or bill consideration.)
Aon Publications
Congress Passes Inflation Reduction Act of 2022
President Biden is expected to sign into law the Inflation Reduction Act of 2022 (the Act), which was passed by Congress on August 12, 2022. While the Act addresses tax policy, climate change, and other provisions, it also includes certain health provisions that will impact employers and employer group health plans.
This Aon bulletin discusses the following:
- Medicare Drug Pricing. The Act enables the Department of Health and Human Services to negotiate Medicare prescription drug prices with drug manufacturers and caps the cost of insulin for Medicare beneficiaries.
- Drug Manufacturer Rebate Payments to Medicare. The Act requires drug manufacturers to pay rebates to Medicare if they charge certain prescription drug prices higher than the cost of inflation.
- Cost of Insulin. The Act includes a $35 monthly cap on out-of-pocket (OOP) spending on insulin for Medicare beneficiaries.
- Medicare Part D Prescription Drug Cap. The Act establishes an annual OOP spending cap of $2000 for Medicare beneficiaries.
- Part D Reinsurance Subsidy Reduced. The Act reduces the federal government’s reinsurance subsidy from 80 percent to 20 percent starting in 2025.
- Part D Premium Stabilization. The increase in the base Medicare Part D premium is limited to 6 percent annually from 2024 through 2029.
- Extension of Affordable Care Act (ACA) Premium Tax Credits. The Act extends the expanded ACA premium tax credits until 2025.
- High-Deductible Health Plan (HDHP) Safe Harbor for Insulin Coverage. The Act codifies that an HDHP that does not impose a deductible for insulin-related products can still be treated as an HDHP.
- Impact on Employer Group Health Plans. This Aon bulletin addresses these health-related provisions and any potential impacts on employer-sponsored health plans.
The bulletin is available here.