The Inflation Reduction Act passed the Senate on a party-line vote on Sunday, August 7, and is expected to get a vote in the House of Representatives on Friday before it heads to the desk of President Joe Biden.
The spending bill that is making its way through Congress has a series of benefits for American consumers, including savings on prescription drugs and health insurance premiums as well as tax credits for clean energy household products and electric vehicles.
Democratic Speaker Nancy Pelosi told NBC News on Tuesday that she hopes to pass the bill on Friday, describing it as great and historic. Republicans, however, have unanimously opposed the bill, blasting it as a reckless taxing and spending spree that would not solve inflation and could harm pharmaceutical innovation.
What are the benefits for ordinary Americans?
So what is in it for average Americans? Medicare beneficiaries' yearly out-of-pocket drug expenses would be capped at $2,000 for the first time starting in 2025. There is no cap for drug expenses today. Medicare seniors would also have the option of spreading out their expenses over monthly payments.
According to a nonpartisan Kaiser Family Foundation study, the average Medicare recipient spent $5,460 on out-of-pocket costs, such as copayments and deductibles, in 2016. In addition, the bill would grant beneficiaries free recommended vaccines, including vaccines for shingles and COVID.
For those wanting to buy an electric vehicle, the bill would offer a credit of up to $7,500 for qualified clean vehicles, including popular models from Tesla, General Motors, and others. The credit would then drop for vehicles that don't meet all the requirements for electricity power and mineral or battery components.
The legislation would also boost the credit for installing qualified goods, such as Energy Star products, at nonbusiness properties from 10 to 30 percent. According to the Senate Finance Committee, that includes solar water heating, fuel cell, solar electric, small wind energy, and geothermal heat pumps.
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Monthly insulin cap for Medicare users starting in 2023
The bill would replace a lifetime cap on credits with a $1,200 annual credit ceiling, offering $500 for doors and $600 for energy-efficient windows. That would jump to $2,000 for heat pumps and biomass stoves. The bill would also enhance the existing credits to upgrade electrical panels (to $600) and cover home energy audits (to $150).
The legislation would impose a $35 monthly cap on the cost of covered insulin products for Medicare beneficiaries, starting in 2023. Last month, a study from Health Affairs found that 41 percent of people who use insulin were on Medicare.
Overall, 14 percent of those using insulin said they spend catastrophic levels of money on insulin. That is more than 40 percent of their remaining income after paying for housing and food. Democrats tried to cap insulin costs on the private market at $35, but Republicans objected to the provision.
