Broken Promises: The Inflation Reduction Act's Impact on Alabama's Seniors

In 2022, President Biden signed the Inflation Reduction Act (IRA), promising it would lower Medicare costs for seniors. But for Alabama's seniors, the reality has been far different. A new report reveals Medicare Part D premiums have skyrocketed 21% this year, with even higher prices expected next year. The IRA, instead of being the promised solution, is dismantling the Part D drug benefit and burdening Alabama's seniors with unaffordable costs.

Alabama has one of the nation's largest rural senior populations. These individuals have worked hard and deserve affordable access to necessary medications. But the IRA is making that access increasingly difficult. The law's main reform gave Medicare officials the power to set prices on more covered medicines. Most assumed this would mean savings at the pharmacy counter. However, the IRA's price-setting provision was designed to save the government money, not patients.

While the $35 monthly cap on insulin costs has taken effect and is popular, other provisions have proven to be a bait-and-switch. For example, the scheduled decrease in the out-of-pocket maximum for prescriptions from $3,300 to $2,000 sounds beneficial. But lawmakers knew they couldn't eliminate the $1,300 difference and had no intention of covering it. So, they shifted the cost to insurers, who have passed it on to consumers through higher premiums and restricted drug access. In essence, Alabama seniors are paying more now for out-of-pocket savings promised in 2024.

The IRA's consequences for Alabama's seniors are far-reaching and deeply troubling. This year, Part D premiums are up 21%, and could increase by 50% next year. Medicare beneficiaries will see these hikes when shopping for plans starting October 1.

As President Biden campaigns on "lowering drug costs" this fall, many Alabama seniors will be shocked by the high premiums for the benefits they need.

Another troubling consequence is the decreasing number of choices for Alabama's seniors. When the government created Part D in 2003, it was unclear if any insurers would participate. Yet over 1,400 plans joined within a year.

In 2024, the number of available plans is less than half of what it was when the program launched. Nearly 100 plans disappeared last year alone, and the current selection is the smallest ever.

The situation is bleak for all Medicare recipients, but low-income enrollees are suffering the most. The number of Part D plans available to them has fallen 34% in the past year. One major health plan has already indicated they are pulling out of the Part D market in 2025, which could force almost 200,000 seniors to find a new plan. We expect more plans to leave the market, further reducing options for Alabama's beneficiaries.

The IRA has also led to Part D insurers aggressively cutting costs by adding "prior authorization" requirements and pushing patients toward the cheapest therapies first. This may benefit insurers but is a poor substitute for a well-designed benefit that puts patients first. Alabama's seniors deserve better than to have their care dictated by an insurance company's bottom line.

None of this was necessary for our country’s seniors. Bipartisan proposals for a smarter, less disruptive redesign of the drug benefit were proposed but ignored in the rush to pass a partisan bill. Over 50 million American seniors are enrolled in Medicare, with a disproportionate number in Alabama. They were told the Biden administration was improving the drug benefit. Now they're learning the IRA is breaking it.

It's time for lawmakers to review what went wrong and take immediate action to fix it. Alabama's seniors deserve better than broken promises and skyrocketing premiums. They deserve a Medicare drug benefit that is affordable, reliable, and puts their needs first. The IRA's failures cannot stand. It's time for real reform that delivers the savings and security Alabama's seniors were promised.

Alabama's members of Congress must demand change. They must push for legislation that stabilizes the Part D program, increases transparency, and puts patients ahead of insurers and pharmaceutical companies. Anything less betrays the trust placed in them by the seniors they serve.

The truth about the IRA is out. Now it's time for action. Alabama's seniors are watching. They demand and deserve better.

John Rice

Chairman, East Alabama Republican Assembly, Former State Senator