Anzhe Zhang

Through the Inflation Reduction Act (IRA), millions of North Carolinians are set to face lower health care costs through cut prescription drug costs, lower health insurance premiums, and expanded coverage, especially if they’re a senior or part of a family.

Hundreds of residents are set to see a reduction in their health insurance premiums by $760 on average, while 135,000 residents will qualify for health insurance under the expanded coverage. Meanwhile, tens of thousands of residents will see a cap in their insulin copays.

North Carolinians facing conditions such as cancer and lung disease, who have long struggled with the out-of-pocket costs of their medication, will finally see some form of relief through the IRA’s new rule, which caps out-of-pocket costs for medication to $2,000 by 2025. In total, 51,000 patients in the state will benefit from this price cap, with 1.6 million more patients under Medicare Part D protected from future prescription drug costs, according to the Kaiser Family Foundation. 

On average, Americans pay two to three times more than what people in other countries pay for their prescription drugs. Spiriva, used to treat asthma, had a net price of $250 in the U.S. in 2020 compared to somewhere between $30 to $52 for countries like Canada, France, and Australia.

The IRA mitigates this problem by allowing Medicare to negotiate with pharmaceutical companies to determine the prices, which will result in lower prescription costs for patients. Likewise, the act outlines that companies will have to pay a rebate to Medicare if drug prices outpace inflation.

North Carolina residents will also see their insulin copay capped at $35 per month starting in 2023 – which according to 2020 numbers an estimated 116,000 residents stand to benefit from. 

Other price provisions involve a Medicare Part D low-income subsidy set to take place in 2024 for residents with incomes up to 150 percent of the poverty line. Previously, beneficiaries that fell in the 135 percent to 150 percent range would only receive partial benefits while still having to face hefty premiums and copays. Some 23,000 North Carolinians are set to benefit from the expanded help outlined in the IRA.

Lastly, starting in 2023, vaccinations covered under Medicare Part D will no longer have an out-of-pocket cost for patients, benefiting an estimated 141,000 residents in the state.

Another key proponent in the IRA is the continuation of the American Rescue Plan (ARP) tax credits through 2025 for Affordable Care Act (ACA) recipients, which will lead to lower premium payments for millions of North Carolinians, while helping them avoid crippling spikes in costs for basic health care.

An estimated 670,000 state residents are saving an average of $760 annually from the continuation of these ARP subsidies, with 106,000 small business owners and self-employed North Carolianians set to especially benefit from the alleviated costs for health care. Additionally, seniors enrolled in the ACA who might have had to, for example, pay 21 percent of their income for insurance will see that number capped off at 8.5 percent of their income.

The IRA is also set to provide coverage for tens of thousands of ACA health care recipients in North Carolina, as it’s projected that 135,000 more residents will have insurance in the state due to the passage of the act.