The Inflation Reduction Act was signed into law one year ago this week. The law is already lowering the cost of healthcare, with more savings on the way for Virginians like Irvin Varkonyi.
What would you do with an extra $8,000 per year?
Would you save for a rainy day? Invest? Pay down debt? Travel?
For Irvin Varkonyi, this question isn’t just a hypothetical. The 72-year-old Mantua resident and his wife will soon be saving roughly that much per year—and perhaps as much as $10,000—thanks to a provision in President Biden’s Inflation Reduction Act (IRA) designed to save seniors money.
The law, which Biden signed one year ago this week and passed Congress with only Democratic votes, included a measure that will cap annual out-of-pocket drug costs for seniors to just $2,000 per year starting in 2025.
According to estimates from the US Health and Human Services department, the provision is expected to benefit nearly 400,000 Virginians with Medicare prescription drug coverage, who will save more than $440 per year on average as a result of the provision.
But Varkonyi and his wife stand to save far more.
The couple, who’ve lived in Fairfax County since the late 1990s, currently spend a combined $14,000 annually on prescription medication, due in large part to Varkonyi’s psoriasis, a skin disease that can cause rashes, itchy, scaly patches of skin, and shedding.
Vrkonyi said his psoriasis can be “very debilitating,” but years ago, when he was still on private insurance, he started a medication, Skyrizi, that keeps his symptoms at bay.
“I had a simple $5 copay for these injections and the medication requires four injections per year,” Varkonyi said. “Since I began the Skyrizi medication, [my psoriasis] has not come back.”
But after he got on Medicare, Varkonyi’s copay for Skyrizi—which has a list price of nearly $20,000 for a single dose—-skyrocketed from $5 to an average of $1,500 per dose, forcing him to spend $6,000 a year on just one medication.
Varkonyi considers himself lucky; he and his wife are both semi-retired and had “good long careers” and are “relatively comfortable.” But the cost of his medication is difficult to swallow.
“We do have to watch our expenses,” Varkonyi said.
But in 2025, Varkonyi and his wife will get to save that money, allowing them to preserve more of their retirement savings instead of spending them.
“You don’t ever want to do that because you don’t know what tomorrow will bring,” he said. “It’ll give us more peace of mind that we have a little bit more that we can keep, should there be whatever kinds of emergencies.”
Varkonyi knows that additional illnesses or medical issues are possible as they age, and said that saving as much as $10,000 per year will make things a lot easier for him and his wife, should other health concerns arise.
The couple could ultimately wind up saving even more thanks to another provision in the Inflation Reduction Act, which gives Medicare the right to negotiate the price of some high-priced drugs to save both patients and the government money.
Several drug makers are suing over the program, which is set to begin negotiations on the first 10 high-priced drugs this fall. The list of specific drugs is set to be announced on Sept. 1, and if the program ultimately survives court challenges, it will go into effect in 2026, providing Virginians with huge savings.
Hundreds of thousands of other Virginia residents are also benefiting from the IRA, including more than 300,000 people who are saving an average of $407 a month on Affordable Care Act health insurance premiums and more than 35,000 Virginians on Medicare who use insulin are now charged no more than $35 per month for an insulin prescription.
Varkonyi is also pushing for drug reform on the state level, most notably by advocating for the creation of a prescription drug affordability board, which would have the power to review drug costs and limit how much state agencies, health plans, and individuals pay for certain prescription medications.
A recent survey commissioned by AARP Virginia and conducted by the Wason Center for Civic Leadership at Christopher Newport University found that 75% of Virginia voters support the creation of a prescription drug affordability board. Democrats tried to create a board this year, but the effort was blocked by the Republican-led state House.
“It just blows our mind why we can’t get something like a prescription drug board approved in Virginia,” Varkonyi said. “But we’re going to keep trying … we’re going to keep on fighting.”