ARI SHAPIRO, HOST:
If you think your prescription drugs are too expensive or if it bothers you that they cost more in this country than practically anywhere else in the world, listen up. The Senate could vote as soon as tomorrow on the Inflation Reduction Act, the huge package hashed out by Democratic senators, and it includes some significant changes to drug pricing and health insurance. NPR health policy correspondent Selena Simmons-Duffin is here to tell us more. Hey, Selena.
SELENA SIMMONS-DUFFIN, BYLINE: Hi, Ari.
SHAPIRO: What are the highlights of this bill?
SIMMONS-DUFFIN: Well, for the first time, the U.S. health secretary would be able to directly negotiate the price of certain expensive drugs in Medicare. This only applies to a few drugs a year. It doesn't start until 2026. But health policy experts say this is a big deal. Medicare has never been able to negotiate the price of drugs before. Also in this bill, seniors won't have to pay more than $2,000 a year out of pocket on prescriptions. So that's going to help people with conditions like cancer and multiple sclerosis. And if drug companies raise the price of their drugs faster than inflation, they have to pay a rebate to Medicare. So that's going to hopefully keep drug companies from raising their prices over and over.
SHAPIRO: That sounds like big news for Medicare, for senior citizens. What about for those of us who are not yet retirement age?
SIMMONS-DUFFIN: Well, this affects all of us because it's going to save the government an enormous amount of money, almost $300 billion through 2031. That's according to the Congressional Budget Office. So that's money the government won't be giving to drug companies that can be used for other things like climate and clean energy and other big initiatives. And it's also going to help pay for federal subsidies that are making health insurance plans that people buy on the Affordable Care Act marketplaces actually affordable, living up to the name.
SHAPIRO: These are the Obamacare exchanges that were set up after the Affordable Care Act passed, right?
SIMMONS-DUFFIN: Exactly. So there's healthcare.gov, which is the federal marketplace, and over a dozen state-run marketplaces. So people who don't get insurance through work and don't qualify for Medicare or Medicaid can just go into these marketplaces and buy a plan. Last year, because of the pandemic, Congress put billions of dollars towards essentially giving people discounts on their premiums. The Biden administration said 4 out of 5 enrollees qualified for plans that were $10 or less per month. That's, you know, pretty affordable. And it seems to have made a difference. Fourteen million people signed up during open enrollment last fall. That is the most ever. And it's probably one of the reasons the percentage of Americans who are uninsured dropped to a record low in the first few months of this year. Only 8% of Americans are uninsured right now. That's the lowest it has ever been. It means 92% of Americans have health insurance.
SHAPIRO: Wow, the highest percentage ever. So this bill is poised to pass with no Republican support. They're all expected to vote against it. What's the objection?
SIMMONS-DUFFIN: Well, Republicans don't like these extra subsidies from the federal government. They say that it makes people too dependent on the government and that some of the people benefiting might be high-income. But they especially object to the health secretary negotiating the price of drugs in Medicare. They say it's government price setting. And they argue that it will lead to fewer cures coming to market because it will reduce the revenue coming in to drug makers that they can then use for research and development of new drugs. However, the Congressional Budget Office estimates only about 1% of drugs that would be developed over the next 30 years won't come to market because of this reduced revenue. And voters really want to see Congress do something about the cost of prescription drugs and health insurance premiums. They don't seem to be buying these doomsday arguments. In a Kaiser Family Foundation poll from last fall on Medicare negotiation, 90% of Republicans agreed with the statement, quote, "even if U.S. prices were lower, drug companies would still make enough money to invest in the research needed to develop new drugs."
SHAPIRO: Ninety percent of Republicans said that.
SIMMONS-DUFFIN: Yes.
SHAPIRO: NPR's Selena Simmons-Duffin. Thanks a lot.
SIMMONS-DUFFIN: Thank you.
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