The Inflation Reduction Act, a massive climate, tax, and healthcare bill, has implications for the self-funded community. It's true that certain highly anticipated portions of the bill were removed, including insulin price caps for all group health plans, but this bill is still relevant for employers with self-funded plans.

Prescription Drug Price Negotiation

Subtitle B of the Inflation Reduction Act addresses one of the pitfalls in the creation of Medicare Part D program, which prohibited Medicare from negotiating the price of prescription drugs. This will allow Medicare to negotiate for the price of prescription drugs starting in 2026. This program will begin with a list of the top 10 most expensive drugs covered under Part D and will gradually expand to 20 prescription drugs in 2029.

The bill also includes reforms that are intended to reduce drug costs beginning in 2023. Drug makers will be penalized in the form of rebates to the government if they impose price increases that exceed general inflation. In the final version of the bill, this rebate program is limited to Medicare participants and will not apply to private group health plans.