Gov. Ned Lamont and his social services commissioner touted Thursday the expected impact on health care costs in Connecticut of the so-called Inflation Reduction Act, a federal legislative package filled with long-sought Democratic priorities that is expected to receive final passage in Congress before the end of the week.
During a televised press conference in Hartford, Social Services Commissioner Deidre Gifford said the Inflation Reduction Act would directly impact Connecticut patients through the bill’s $2,000 cap on out-of-pocket drug costs for seniors on Medicare and its extension for three years of boosted federal subsidies for some plans on the state’s health insurance exchange.
About 19,000 Connecticut residents on Medicare spend more than $2,000 in out-of-pocket drug expenses. Meanwhile, Gifford estimated that as many as 24,000 residents would be uninsured were it not for the enhanced federal insurance subsidies that were extended under the bill but otherwise set to expire at the end of the year.
“What does this mean for our state overall? The [American Rescue Plan Act] enhanced subsidies provide nearly $15 million a month in financial assistance to people in Connecticut,” Gifford said. “That’s $178 million annually in additional premium subsidies for eligible people in Connecticut. So a huge infusion of support to help make health insurance more affordable.”
After prolonged negotiations, the U.S. Senate passed the bill on a party-line vote during an overnight session over the weekend. The House is expected to take it up before the end of this week.
What didn’t make the legislation was a provision that would make sure that drugmakers were penalized for hiking costs faster than inflation for the 180 million Americans with private health insurance.
During a press conference Monday, Connecticut’s U.S. senators lauded passage of the 755-page bill, which also contains provisions that devote billions to investments aimed at curbing climate change as well as paying down the federal deficit. Spending in the bill has been offset by a new 15% minimum tax on companies earning more than $1 billion a year in profits.
The bill has received opposition from Republicans as well as the pharmaceutical industry. In a press release issued following the Senate debate, the Pharmaceutical Research and Manufacturers of America, a lobbyist group for the industry, objected to a provision that allows the government to negotiate drug costs with pharma companies.
“Today’s vote may feel like a political win for Democrats, but it’s really a tragic loss for patients. This drug pricing plan is based on a litany of false promises,” Stephen J. Ubl, the group’s president and CEO, said in a statement on Sunday.
Ubl argued that prescription medicine prices were not blame for rising inflation.
“They say this is ‘negotiation,’ but the bill gives the government unchecked authority to set the price of medicines. And they say the bill won’t harm innovation, but various experts, biotech investors and patient advocates agree that this bill will lead to fewer new cures and treatments for patients battling cancer, Alzheimer’s and other diseases,” Ubl said.
During Thursday’s press conference, Gifford said congressional analysts had concluded the bill would have no significant impact on the development of new drugs.
Lamont said he was not worried the bill’s passage would impact pharmaceutical jobs based in Connecticut.
“We have an amazing pharma industry. Pfizer saved millions of lives, I think. I appreciate that,” Lamont said. “I think these are some much-needed reforms that will make a difference overall. Nobody’s taking away their rate of return and profit on any new drug that comes out.”
