A $740 billion health care bill narrowly passed through the Senate on Sunday, Aug 7, 2022. The Inflation Reduction Act passed through the Senate with a tiebreaker vote by Vice President Kamala Harris. It focuses on expanding Medicare, reducing inflation, and tackling global warming. Here’s everything you need to know about the deal.
Health care
Of note, for the first time, Medicare will be able to negotiate the price of life-saving medication in 2023. Dems expect the change to save several hundred billion dollars in pharmaceutical spending over the next decade.
The bill also sets a $2,000 annual cap on out-of-pocket costs for Medicare recipients. It also would have capped monthly insulin costs at $35 for Medicare patients. However, Senate Republicans blocked the insulin cap for private insurance. Along with limiting medication costs, the health care bill extends the Affordable Care Act through 2025.
Climate change and eco-friendly energy
The Inflation Reduction Act allocates almost $400 billion to clean energy and cutting carbon emissions. According to Democrats, the bill will help reduce national carbon emissions by about 40% by the decade’s end.
The act also includes a $4,000 tax credit for purchasing a used electric vehicle (EV) and a $7,500 for buying a new EV. Though, the credit is only for individuals in the lower and middle-income tax brackets.
$30 billion of the plan goes to tax credits for producing clean energy. The package includes solar panels, critical mineral processing, wind turbines, and EV production. President Biden also recently passed a $3 billion bill to boost EV production and $5 billion for charging stations. The goal is to have EVs and plug-in hybrids make up half of all vehicle sales by 2030.
Taxes
The bill will set a 15% corporate minimum tax for companies with over $1 billion in annual revenue. Though, some companies are exempt from the 15% corporate tax thanks to a last-minute bipartisan amendment. The package will allegedly cut the national deficit by over $100 billion and generate $204 billion over the next decade.
