Implications for Patients under the Inflation Reduction Act (IRA)

In 2022, the Inflation Reduction Act was signed into law. This 800+ page law covers a wide variety of topics and issues, including healthcare, which is my major concern right now. As with any significant legislation, there are often unintended consequences and questions swirling as the healthcare provisions affecting patients directly become effective in January of 2025, right around the corner. After participating in a live webinar with Lumanity last week and since it is open enrollment for Medicare right now, I thought it may be timely to share what I believe all patients need to know now and going forward.

First, does someone with private insurance need to be concerned about the IRA? While the IRA establishes changes to Medicare, we’re already seeing implications for patients who have private insurance policies as manufacturers adjust their co-pay assistance programs (including how and who can apply), premiums are raised, formularies (medications covered by the plan and at what cost) are adjusted and other provisions designed to ensure that patients are on medication that generates the most profit for insurers. It is important to remember that while there is only one cancer medication (specifically for those with blood cancers) on the first list of medications affected by price negotiations, the medications initially on the list for price negotiations are often prescribed for those of us taking cancer medication to address the side effects and co-morbidities. In short, the provisions of the IRA that affect Medicare will have far reaching implications for the entire healthcare system, affecting each person accessing medical care and all patients need to be aware.

Second, what is going to be different for people with Medicare? The two provisions I’m most concerned about that will affect patients with Medicare in 2025 is the cap of $2,000.00 on out of pocket costs for oral medication through Part D and the potential for smoothing. I have included questions below for anyone affected by these provisions as well as a link to the application to pay the $2,000.00 co-pay over time (a/k/a smoothing).

With these things in mind, what can patients do? Since the healthcare provisions of the IRA directly affecting patients don’t take effect until January of 2025, patients aren’t able to do much in the short term. However, preparing for the changes is key so that we are each educated when the changes become the reality in our provider’s offices or at the counter when purchasing medication from a pharmacy. Preparing for the coming changes is primarily information gathering at this point and then preparing/budgeting for any cost changes in 2025. As a reminder, patients need to understand that the people we encounter through the healthcare system are likely grappling with all of the practical implications for everyone and the implementation will likely have some bumps, so patience is key.

Questions patients on private insurance need to ask now, before the IRA is implemented next year:

• Am I taking a medication that has been subjected to price negotiations already? If so, will something change for me?
• Are there changes coming to my insurance plan’s formulary (medication covered and at what price) and how/when will that impact me?
• Are there changes coming to how prior authorizations are processed and how will that impact me?
• Am I still eligible for the co-pay assistance programs in 2025 that I have now?
• What does step therapy or “fail first” requirements mean on my plan? Are there exceptions? How will I be affected?

Questions patients exploring Medicare options need to ask now, during open enrollment?

• Am I working with an independent broker who can provide insight on a variety of plans from different companies?
• Do I know what is covered on each plan I am considering?
• Will I have to make changes to medications prescribed or the providers I see or the hospital system closest to me with a new plan?
• Is the cost of my current or prospective plan changing?
• What is my out of pocket responsibility?
• Is smoothing a good option for me? How do I request smoothing? How will it be implemented?

Questions patients already on Medicare need to ask right now?

• Am I on the best plan for me right now? If so, great, if not, do I know an independent broker who can assist me in locating the best plan for me right now?
• Am I taking prescription medication that will be impacted by the IRA? If so, how?
• What is changing on my current plan for 2025? What do I need to know about navigating those changes?
• Is the cost of my current or prospective plan changing?
• What is my out of pocket responsibility?
• Is smoothing a good option for me? How do I request smoothing? How will it be implemented?

Who should patients turn to when they have questions? As the provisions of the IRA become reality, patients will need help. It is likely the providers won’t be in the best position to answer questions, especially those at the larger academic or research institutions and spending any amount of the few precious minutes we get with our doctors on this topic is not a good use of that time, in my opinion. The providers or institutions have likely delegated the implementation of the changes to key staff/groups in each office/center. The three people that every patient should be aware of are: 1) Social workers along with billing offices/personnel at your provider’s office or cancer center; 2) Pharmacy staff/managers; and 3) case managers at insurer. Each of these people will know different pieces of the puzzle and it may be helpful to conference in someone from your provider’s office with an insurance plan representative to unravel any complications.

What is smoothing and how do I request it? Smoothing is the ability to spread out the out of pocket cost of oral prescription medication (capped at $2,000.00 annually) over a calendar year. It is especially helpful when there is a medication taken all year that is prescribed in January, but the value may decrease when the medication is prescribed later in the year. To request smoothing, a form must be filled out and submitted to the plan/insurer, who will be responsible for managing the payment plan. You can read more and get a copy of that form here. Right now, there are no required grace periods or flexibility and it appears that if a patient fails to make all of the required payments that the entire balance of the $2,000.00 co-pay will be owed. It’s important to know the details and any provisions that may affect your ability to elect or keep smoothing in place.

In a few months, after these provisions have taken effect and kinks are worked out, we are going to know much more. At the same time, I have concerns even before we work out some of these details about the complexity of these issues and the burden on patients. Access to care, good care, and medication that addresses diagnoses effectively is a matter of life and death for so many people. The more complicated accessing care is and the more barriers to accessing that care, the harder continuing to stay alive and healthy truly is. While I am hopeful that solutions will be found, I am worried for patients, that we will be the ones to suffer in the end because of the unintended consequences of the IRA.

If you’ve read this far and are interested in learning more, here are some articles that I found interesting in one way or another. And always interested in thoughts, suggestions, ideas that will help patients access the care they need. If you are part of the MBC community, join us at Project Life, where we have resources, including a checklist to assist anyone applying for smoothing, and are hosting Q&A conversations around this topic.

• Why does the IRA exclude expensive Cancer treatments in price negotiations? https://pubmed.ncbi.nlm.nih.gov/38060993/#:~:text=Conclusion%3A%20The%20IRA%20negotiation%20provisions,exposed%20to%20high%20drug%20costs.
• A Decrease in Innovation is a large Concern with new IRA policies in Oncology: https://www.onclive.com/view/a-decrease-in-innovation-is-a-large-concern-with-new-ira-policies-in-oncology
• How Potential Unintended Impacts of the IRA may affect Patients: https://www.ajmc.com/view/how-potential-unintended-impacts-of-the-ira-may-affect-patients-dr-julie-patterson
• Is CMS paying attention to the growing access barriers for Medicare patients under the IRS? https://phrma.org/blog/is-cms-paying-attention-to-the-growing-access-barriers-for-medicare-patients-under-the-ira