Many seniors in the United States face significant financial strain due to the soaring costs of prescription drugs and healthcare expenses. This year, however, a beacon of relief shines through with The Inflation Reduction Act, promising substantial reductions in these burdens, particularly for individuals grappling with conditions like cancer or heart disease.
As my 65th ‘Medicare birthday’ approaches in a couple of months, I delved into the details of these transformative changes, which had surprisingly eluded mainstream news coverage. Previously, thousands of Medicare beneficiaries grappled with staggering annual expenses exceeding $14,000 for blood cancer drugs, upwards of $10,000 for ovarian cancer medications, and over $9,000 for breast cancer treatments.
The landscape shifted dramatically in 2023 when the Biden administration implemented a crucial measure, capping out-of-pocket expenses for prescriptions at $3,500, regardless of the specific drugs required. Building upon this momentum, 2024 brings even greater relief as the cap for all Medicare out-of-pocket prescriptions plummets to a maximum of $2,000. This significant alleviation promises to ease the financial strain on countless seniors, providing them with much-needed respite from exorbitant healthcare costs.
“The American people won, and Big Pharma lost,” President Biden had announced in September 2022, after the legislation passed. “It’s going to be a godsend to many families.”
The shingles vaccine, an essential medical measure often forgone by seniors due to its expense, has now been made accessible at no cost. Shingles, characterized by a painful rash accompanied by blisters, can lead to chronic pain and various complications without a definitive cure. Previously, over 2 million seniors paid hefty sums ranging from $100 to $200 for this vaccine annually. However, as of last year, Medicare prescription drug plans have eliminated this financial burden entirely.
In another significant win for consumers against pharmaceutical giants, the affordability of life-saving insulin has been dramatically improved. The price of insulin has been capped at a mere $35 per month, offering relief to individuals battling diabetes regardless of age.
Moreover, Medicare has taken strides to reduce healthcare costs by lowering premiums for Part B, which covers outpatient visits. Approximately 15 million Americans stand to save an average of $800 per year on their health insurance expenses, as reported by the US Department of Health and Human Services.
A landmark development occurred last year when Medicare, leveraging its substantial patient base, commenced negotiations for fair drug prices, marking a departure from passively accepting exorbitant pricing demands from pharmaceutical companies. Negotiations initially targeted ten of the most widely used and expensive drugs, including Eliquis, Jardiance, and Xarelto, each with a significant user base ranging from millions to over a million. These ten drugs represent the highest total spending within Medicare Part D prescription plans.
The impact of reducing prescription drug costs extends beyond individual savings, as it also alleviates federal budget deficits by hundreds of billions of dollars. This multi-faceted approach not only enhances accessibility to crucial medications but also yields substantial fiscal benefits, underscoring the importance of ongoing efforts to address healthcare affordability and sustainability.
How These Are Being Paid
The provision of essential benefits by the government relies on ensuring that the largest corporations in America contribute their due share of federal taxes. This ensures a fair and equitable distribution of resources to support social programs.
An illustrative example from 2020 underscores the issue: Numerous Fortune 500 companies, despite amassing profits totaling $40 billion, managed to evade federal tax obligations entirely. This highlights a significant disparity in tax responsibility.
To address this, starting from 2023, U.S. corporations are mandated to adhere to a minimum corporate tax rate of 15 percent. This initiative was set in motion by the Inflation Reduction Act, which introduced the Corporate Alternative Minimum Tax (CAMT). The CAMT imposes a 15% minimum tax on the adjusted financial statement income of corporations with average earnings exceeding $1 billion. This measure aims to ensure that profitable corporations contribute proportionately to the nation’s tax revenue.
Despite longstanding concerns over escalating healthcare expenses, the recent years have seen notable progress in addressing this issue. Various positive developments have emerged, offering hope for improved access and affordability in healthcare for Americans.
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