President Signs Inflation Reduction Act Into Law
On Tuesday, August 17, the President signed the Inflation Reduction Act bill into law. The $750 billion health care, energy and climate bill which was passed by the House and Senate last week, contains many major health policy changes, including:
- Giving Medicare the power to negotiate prescription drug prices and extend expiring health care subsidies for three years;
- Imposing Medicare penalties on drug companies if they increase prices faster than inflation (to begin in 2023);
- Limiting out-of-pocket Medicare drug costs to $2,000 a year for medications purchased at a pharmacy, beginning in 2025;
- Providing Free vaccines for Medicare enrollees (currently limited to only certain vaccines, such as COVID-19, pneumonia, and flu);
- Capping insulin prices at $35 a month for Medicare beneficiaries (beginning in 2023); and
- Extending enhanced federal premium subsidies for Affordable Care Act (ACA) coverage through 2025.
The legislation aims to reduce the deficit and will be paid for through new taxes, including a 15% minimum tax on large corporations and a 1% tax on stock buybacks.
The bill will raise over $700 billion in government revenue over 10 years and spend over $430 billion to reduce carbon emissions and extend subsidies for health insurance under the ACA. The rest of the new revenue will be used to reduce the deficit.
