Senior Advisors
  • Home
  • FREE Quotes
  • About YOU
    • Turning 65, Ready to enroll?
    • Working Past Age 65?
    • Already on Medicare, Looking to Save Money?
    • Currently on a Retiree Plan?
  • About Us
  • Products
    • Medicare Supplements & Medicare Advantage >
      • Medicare Supplement - Plan F >
        • Plan F (2022)
        • Plan F (2023)
      • Medicare Supplement - Plan G >
        • Plan G (2022)
        • Plan G (2023)
      • Medicare Supplement - Plan N >
        • Plan N (2022)
        • Plan N (2023)
    • Medicare Part D - Prescription
    • Medicare & Dental
    • International Travel
    • Long-Term Care Insurance
    • Cancer and Heart Attack or Stroke Insurance
    • Medigap Plans
  • Workshops
    • Register for Workshop
    • Watch Workshop Now
  • Carrier Partners
  • Medicare Blog
  • Testimonials
  • Contact Us
  • Become an Agent
  • Areas We Serve
    • Basking Ridge, NJ
    • Livingston NJ
    • Medford, NJ
    • Mountainside, NJ
    • Mount Laurel, NJ
    • Philadelphia, PA
    • Phoenix, AZ
    • Scotch Plains, NJ
    • Scottsdale, AZ
    • Short Hills, NJ
    • Summit, NJ
    • Westfield, NJ
    • Princeton, NJ
    • Washington Township
    • Monroe Township, NJ
  • Medicare FAQs
  • Coffee with Justin
  • Medicare Minute

inflation reduction act of 2022?

8/7/2022

32 Comments

 
You may have seen in the news there is new legislation that may be passing soon in Washington DC called "Inflation Reduction Act of 2022".  The House has already passed the bill (when it was called the Build Back Better Act) and it is close to being passed in the Senate.  If it gets passed in the Senate, the President will sign it into law.

You can find the full text of the bill here, and below is a brief summary (link to Source).

The bill would raise revenue from:
- Imposing a 15% corporate minimum tax rate for companies with higher than $1 billion annual revenue – $313 billion
- Prescription drug price reform to lower prices, including Medicare negotiation of drug prices – $288 billion
- Increased tax enforcement – $124 billion
- Imposing a 1% excise tax on stock buybacks - $73 billion

It would spend this revenue on:
- Continuing for three more years the expansion of Affordable Care Act subsidies originally expanded under the American Rescue Plan Act of 2021 – $64 billion
- Addressing domestic energy security and climate change – $369 billion
- Funding for drought relief - $5 billion
- Deficit reduction – $306 billion


Impacts to Medicare Beneficiaries
There are two main impacts to Medicare Beneficiaries in the bill.
  1. Addition of Hearing Coverage and Hearing Aid Coverage  (Updated August 8, 2022-  Unfortunately, this benefit was removed in the final bill.)
  2. Creation of $2,000 Maximum out of Pocket for Part D Drug Costs starting in 2025 - this looks like a positive change for Medicare beneficiaries.  In the current system, there is technically unlimited exposure for Part D Prescription Drug costs, because there is no Maximum out of Pocket limit.  In the proposed bill, there will be a cap of $2,000 (in 2025, then ironically inflation-adjusted periodically) on Part D Prescription Drug Costs.  For those beneficiaries, with very expensive medication, this will bring some relief starting in 2025.  We shall see what the impact will be to the Part D Premium costs based on this change.

My concerns with the Bill are below.
  • The two main projected revenue sources will likely never meet the $600 Billion revenue projected in the bill.  However, the $400 Billion in projected spending will certainly happen which will likely continue to increase inflation, not reduce inflation.  Ironic.
  • Why am I so pessimistic about the $600 Billion in projected tax revenue?
    • $313 Billion projected from 15% minimum corporate tax rate - these large corporations have entire teams of internal and external accountants that find creative solutions (e.g. moving businesses to other countries) to reduce their tax rates.  The idea that $313 Billion in incremental tax revenue is going to be generated from this new rule just seems overzealous.
    • $288 Billion projected from Prescription Drug Price reform and Medicare negotiation of drug prices.  I am actually supportive of fixing Prescription Drug Pricing in this country.  I think drug pricing is out of control and makes no logical sense in a lot of cases (e.g. expensive drugs that treat chronic conditions and have been around for many years.). The largest lobbying group in Washington DC (by far) is the Pharmaceutical industry ($300 Million+ per year) and they seem to continue to find ways to maintain the current system which provides huge profits for Pharmaceutical companies.  

I really hope my pessimism is incorrect.  If the bill does get passed, I hope these changes work and generate the additional $600 Billion in Tax revenue (plus the other $200 Billion projected).  Otherwise, the additional spending in this bill will continue to drive increased Inflation for many years to come.
32 Comments
Barbara A Leto
8/7/2022 02:26:12 pm

thanks for the info. RX is always a concern. mine are out of control. Unfortunately by the time this gets passed I will be 85 years old. They have been trying for years...no reason we have to pay so much for prescriptions...or hearing aids. It should be easier for seniors but when you are in the middle class it is not. Thanks for keeping us updated.

Reply
Justin Lubenow
8/8/2022 05:05:17 am

Thanks for your comment, and I hope you are able to take advantage of these changes when they get implemented.

Reply
Paul Levine
8/8/2022 04:39:32 pm

I share your pessimism.

Reply
Deborah Cohen
8/8/2022 02:54:32 pm

Thanks for this update. As a wearer of hearing aids that provision sounds very good to me as they are indeed very expensive.

Reply
Justin Lubenow
8/9/2022 04:32:38 am

Hi Deborah - sorry to say, the Hearing benefit was removed from the final version that was passed.

Reply
Alyce goff
8/23/2022 08:56:17 am

Doesnt that just figure

Don Scafuri
8/8/2022 04:44:58 pm

I think you should also have mentioned this (as reported in Forbes):
"A provision that would have capped insulin prices for private insurers at $35 a month was blocked by Republicans, with 43 senators voting against the provision while 57 lawmakers—including seven Republicans and every Democrat—voted to keep it, falling short of the 60-vote threshold required for non-budget-related items."
This is a travesty for the millions of diabetics who are facing exorbitant insulin price hikes.
Also, the projected tax revenue you're concerned about wouldn't be an issue if those same Senate Republicans (with help from Manchin/Sinema) hadn't blocked a moderate tax increase on super-wealthy individuals.

Reply
Justin Lubenow
8/9/2022 04:36:33 am

Hi Don,
Thank you for the feedback.
From what I can see, there still is a $35 cap on insulin in the bill. This is discussed starting on page 232 of the bill.

Reply
Don Scafuri
8/10/2022 11:06:15 am

The confusion re. the $35 cap on insulin apparently stems from the distinction between those on Medicare & those covered by private insurers. The latest reporting (Aug. 9) summarizes that provision in the Senate bill as follows:

1. The bill seeks to limit insulin costs to $35 per month for those on MEDICARE.
2. But efforts to extend that change to patients covered by PRIVATE INSURERS is NO LONGER in the legislation.

Good news for "private insurers"; not so good for non-Medicare diabetics.

Justin Lubenow
8/10/2022 05:58:01 pm

Thanks for the additional info.
The $35 cap on insulin was actually already in place for Medicare (called the senior savings model implemented back in 2019).
I agree that it needs to be fixed for non-Medicare beneficiaries as well!

Ellen Hohmann
8/8/2022 07:40:27 pm

I also share your pessimism on the ability to generate revenue and mostly likely drives up
Inflation.

Reply
Justin Lubenow
8/9/2022 04:33:28 am

Hi Ellen, thanks for reviewing; we shall see.

Reply
ESTHER Ryniewicz
8/9/2022 08:19:48 am

Justin

thank you for the update your the best in letting everyone know what's going on it would have been great if hearing aids and glasses were included, which as you know when you get older these are items that are expensive,

Reply
Justin Lubenow
8/10/2022 01:21:18 am

Hi Esther,
Yes, Hearing aids were included in a prior version but unfortunately, removed before the final bill was passed.

Reply
Jan Friedman
8/9/2022 06:31:55 pm

Justin. There is so much good in this bill that cannot be ignored!! I know you were just focusing on Medicare but
I think a mention about the rest of the bill being terrific (especially fighting climate change activities) would have given a more balanced and optimistic view. AND, the jobs that will be created may very well help pay for Medicare benefits and help keep inflation down (assuming we have inflation by the time this bill goes into full swing).

Reply
Justin Lubenow
8/10/2022 01:22:54 am

Hi Jan,
Thank you for the feedback. I am not a climate change expert so I was just trying to provide a very brief summary of the bill and highlight the Medicare impacts since that is our focus.
Hope you have a great day!

Reply
John Levine link
8/9/2022 09:24:45 pm

The chances of collecting the 15% corporate tax are pretty good, because it is written as a global minimum. If a corp says some of its income is in a place with 5% tax, that's fine, but the US will collect the other 10%. This is the end of a long process with many other high income countries specifically to deal with tax havens.
Having said that, nothing else depends on that particular provision so we get the Medicare improvements and the climate action either way.
I am very much looking forward to Medicare negotiating a reasonable price for Eliquis.

Reply
Justin Lubenow
8/10/2022 01:26:13 am

Thanks John for providing some additional insight re the Corporate minimum tax.
I believe the majority of the Medicare drug negotiations will be for the expensive Part B medications (e.g. infusion therapies, chemotherapy, etc.) that Medicare pays for; rather than the Part D drugs (e.g. Eliquis). However the $2,000 Maximum out of Pocket should help for those taking Eliquis and other Part D drugs. We shall see.

Reply
Gail Bott
8/10/2022 08:14:41 am

Thanks for the update, Justin. I will be new to Medicare this year and hope more good changes will come, like the hearing/hearing aid portion being passed in another bill. I think something is better than nothing at this point and everything is always worth a try. Unfortunately, republicans just can't get out of their way and work with the Democrats to make a difference and pass bills that would help the American people, so we have to take everything in baby steps. I'm optimistic that this bill will help and that Democrats will build on this with more bills to come.

Reply
Justin Lubenow
8/10/2022 05:56:02 pm

Hi Gail - thank you for your feedback.

Reply
Linda Marshall
8/10/2022 08:36:15 pm

Thanks Justin, sadly I agree with you, mostly because I think that no matter what side of the fence you sit on, there is always hidden agendas to whatever gets passed. I sure hope we are wrong and this bill does do what they say. Can always hope.


Reply
Justin Lubenow
8/12/2022 06:07:27 am

We can hope! :-)

Reply
Georgianna Dickson
8/11/2022 03:43:24 pm

Thank you, Justin, for keeping information flowing, whether all of us understand or not. Script prices for seniors on fixed incomes are so hard to fathom. My husband's shot in the arm yesterday (which took all of two seconds) ultimately cost $53K++! Ridiculous! WHO can DO that!? Thank God for some special programs which assist with co-pays (at least for the time being). I know we're not the only ones, but in these scenarios, company is not desired. Good luck to all others out there facing this "stuff".

Reply
Justin Lubenow
8/12/2022 06:08:41 am

Wow, that is ridiculous. Drug pricing is out of control in this country!

Reply
Patricia Fenn
8/11/2022 08:51:43 pm

Thanks for info. Boy 2025 that's in reality 2 more years of incredible drug costs if we are still using current method of calculation. Right now my drug bills are escalating monthly.

I guess it is what it is but it's a little disconcerting.

Thank you though for all the info and all your help during the last couple of years.

Pat

Reply
Justin Lubenow
8/12/2022 06:10:46 am

You're welcome Pat. These things do take time to implement, but 2025 does seem rather far away.

Reply
melinda price
8/12/2022 12:29:35 am

I don't see anything good coming from this unless we have campaign finance reforms. As long as senate and house candidates continue receiving large donations from big corporations(pharma and insurance) we can't expect any taxing changes to pass. Seniors get shafted every time.

Reply
Justin Lubenow
8/12/2022 06:11:33 am

Hi Melinda - I would be supportive of campaign finance reform as well!

Reply
Robert Sacks
8/12/2022 06:34:15 pm

I share your pessimism.concerning the corporate tax. I appreciate you sending this type of information to your clients.

Reply
Justin Lubenow
8/12/2022 11:38:32 pm

Thanks for reading and providing your feedback Robert.

Reply
Don Scafuri
8/13/2022 01:30:33 am

This article in the 8-10-22 NY Times provided some good info -- & some relief -- for those of us on Medicare:
"For Older Americans, Health Bill Will Bring Savings and ‘Peace of Mind'"
Worth noting that NOT ONE Republican in the House or Senate voted for the bill.

Reply
Corey Koch link
10/29/2022 05:55:37 am

Population dog student key ok investment. Join special likely middle community voice. Guess notice you during far partner prove.

Reply



Leave a Reply.

    Justin Lubenow

    See bio here

    CLICK HERE TO SEND US A TEXT!

    Archives

    January 2023
    November 2022
    September 2022
    August 2022
    June 2022
    April 2022
    March 2022
    January 2022
    November 2021
    September 2021
    July 2021
    April 2021
    March 2021
    February 2021
    January 2021
    November 2020
    October 2020
    September 2020
    August 2020
    May 2020
    April 2020
    March 2020
    February 2020
    January 2020
    December 2019
    October 2019
    September 2019
    August 2019
    July 2019
    May 2019
    April 2019
    February 2019
    January 2019
    December 2018
    October 2018
    September 2018
    August 2018
    July 2018
    June 2018
    May 2018
    March 2018
    February 2018
    January 2018
    November 2017
    September 2017
    August 2017
    July 2017
    June 2017
    May 2017
    April 2017
    March 2017
    February 2017
    December 2016
    November 2016
    October 2016
    September 2016
    August 2016
    July 2016
    June 2016
    March 2016
    February 2016
    January 2016
    December 2015
    November 2015
    October 2015
    September 2015
    August 2015
    July 2015

    Categories

    All

    RSS Feed

Our Services
Company

Products & Services
Carrier Partners
About
Testimonials
Contact Us
Moorestown Office |  214 W. Main Street, Suite 101, Moorestown, NJ 08057 | Tel:856-866-8900
 Servicing Moorestown, Cherry Hill, Mount Laurel, Haddonfield, Voorhees, Medford, Marlton,  Philadelphia, surrounding towns, and licensed in 30+ other states as well.
 
Cranford Office        |  15 Alden Street, Suite 8, Cranford, NJ 07016                  | Tel: 908-272-1970 
 Servicing Cranford, Westfield, Summit, Scotch Plains, Mountainside, Berkeley Heights, New      Providence, Basking Ridge, surrounding towns, and licensed in 30+ other states as well.
​
Phoenix Office  | P.O. Box 
71283. Phoenix, AZ 85050.                                         | Tel:  602- 996-1549
Servicing Phoenix, Scottsdale, Peoria, Sun City, Sun City West, Paradise Valley, Fountain Hills, Cave Creek, surrounding towns and licensed in 30+ other states as well.

Email:  info@senior-advisors.com                                     (Se Habla Español -Tel: 908.481.5678)   

Not connected with or endorsed by the United States government or the federal Medicare program.
​
​
Copyright © 2022 Senior Advisors, LLC       |     Licensing & Legal     |     Privacy Policy

  • Home
  • FREE Quotes
  • About YOU
    • Turning 65, Ready to enroll?
    • Working Past Age 65?
    • Already on Medicare, Looking to Save Money?
    • Currently on a Retiree Plan?
  • About Us
  • Products
    • Medicare Supplements & Medicare Advantage >
      • Medicare Supplement - Plan F >
        • Plan F (2022)
        • Plan F (2023)
      • Medicare Supplement - Plan G >
        • Plan G (2022)
        • Plan G (2023)
      • Medicare Supplement - Plan N >
        • Plan N (2022)
        • Plan N (2023)
    • Medicare Part D - Prescription
    • Medicare & Dental
    • International Travel
    • Long-Term Care Insurance
    • Cancer and Heart Attack or Stroke Insurance
    • Medigap Plans
  • Workshops
    • Register for Workshop
    • Watch Workshop Now
  • Carrier Partners
  • Medicare Blog
  • Testimonials
  • Contact Us
  • Become an Agent
  • Areas We Serve
    • Basking Ridge, NJ
    • Livingston NJ
    • Medford, NJ
    • Mountainside, NJ
    • Mount Laurel, NJ
    • Philadelphia, PA
    • Phoenix, AZ
    • Scotch Plains, NJ
    • Scottsdale, AZ
    • Short Hills, NJ
    • Summit, NJ
    • Westfield, NJ
    • Princeton, NJ
    • Washington Township
    • Monroe Township, NJ
  • Medicare FAQs
  • Coffee with Justin
  • Medicare Minute