President Joe Biden signed a comprehensive health care bill into law on Tuesdayheralding the biggest changes to federal health care policy since the passage of the Affordable Care Act in 2010.
The Inflation Reduction Act makes important changes especially for Oak Street Health’s main patient population – older adults and those on Medicare. It caps out-of-pocket costs for Medicare Part D prescription drugs at $2,000, eliminates out-of-pocket vaccination costs for those with Part D, and sets a $35-a-month cap on insulin for Medicare customers.
The IRA will also extend low-income subsidies for individuals into 2024 with income up to 150% of the current federal poverty level about $20,385 for a single family.
Oak Street Health Chief Medical Officer Ali Khan spoke with Healthcare Dive about the IRA’s impact on his patients on Chicago’s West Side, what health care policies he wants to see next and next steps for the healthcare company primary.
This interview has been edited for clarity and length.
Healthcare Immersion: What are you most excited about in IRA and how will it affect your patients?
Ali Khan: The patients we serve, such as seniors and other Medicare beneficiaries, have to make tough choices today between paying for medicine and paying for food or paying other bills. So this is really a home run, first and foremost, about drugs.
I think drug affordability is such a huge issue for so many people, but especially for the working class, seniors on limited incomes, and other patients that we serve at Oak Street. For those of my patients on the west side of Chicago, putting a $2,000 cap on out-of-pocket drug costs in a given year is a big update.
Also, capping insulin costs at $35 a month puts the super vital drug much more accessible to Medicare patients and I hope it also spurs work nationally to help bring insulin costs under control for everyone . The after effects are better diabetic control, fewer diabetic complications and avoiding things like diabetic foot infections or amputations. Having this limit is at least a start, because patients with uncertain incomes can budget towards it. So providing more structure and consistency here is a really big win.
Given that Oak Street’s primary patient population consists of seniors and those on Medicare, how do you envision the overall impact of the IRA on Oak Street Health?
Khan: The one thing I’m really excited about is expanding low-income subsidies to more seniors. The patients that I serve on the west side of Chicago are really struggling to stretch their dollar, to make the choice between paying the electric bill for the refrigerator that stores their insulin, versus paying for the insulin, versus paying for the food that they need. for insulin to help with digestion. .
So many people are just over that line of eligibility for extra help. This change will save lives because there are now low-income subsidies that apply to a certain percentage of people who are close to 100% of the federal poverty line. But as you go past 125%, they start to gradually recede and then go away completely. Taking it to 150% for low-income subsidies is a large population of people who are otherwise locked out.
What health care issues do you want the government to address next?
Khan: There is some really interesting work going on, particularly at the Centers for Medicare and Medicaid Services, that is looking at how to address social risk. People living in communities that have high social vulnerability, those are the communities that were hit hardest by the pandemic.
We’re starting to see new policies come out of CMS that recognize the underlying inequality across communities and ask how the federal government drives investment in those communities.
At Oak Street, we’ve been thinking about addressing these problems for years. So could the changes from CMS create the momentum to take the work we do today on Oak Street across the country and apply it to the 60 million plus people on Medicare? That would be great. The fact that this has entered the national conversation and we’re seeing some bold proposals here is very encouraging to me.
Since then there has been a lot of interest in primary care companies CVS announced acquisition plans and Amazon announced that it will buys One Medical for $3.9 billion. How is this interest changing the landscape for primary care operators like Oak Street?
Khan: All in all, this is proof that we’ve all been on the right track.
It is also an acknowledgment of the possibility of still striking. Amazon sees a huge opportunity in primary care, and they see it not in the context of trying to buy a bunch of physician groups, it’s not a private equity play. It’s a venture capital game.
One Medical has a different patient population than Oak Street, so there are definitely some things that I can strongly believe differently in terms of health equity and community reinvestment.
But I think there’s still a big milestone for the industry. And it’s a real promise of what can happen if we all get that right, in terms of primary care leading the way and how American health care is fundamentally transformed.