WASHINGTON — The Democratic spending bill passed by Congress encompasses a range of consumer benefits, including tax credits on clean energy household products and electric vehicles, as well as savings on prescription drugs and health insurance premiums.
The Inflation Reduction Act passed the Senate on a party line Sunday and is expected to vote in the House Friday, before going to President Joe Biden’s desk.
“Yes, I hope to pass it on Friday,” Speaker Nancy Pelosi, D-Calif., told NBC News on Tuesday. “It’s a great bill. It’s historic.”
Republicans, unanimously against the bill, have labeled it a “reckless tax and spending wave” that wouldn’t fix inflation and could hurt pharmaceutical innovation.
The legislation includes more than $400 billion in spending on energy and health care programs, with more than $700 billion in revenue from drug savings and higher taxes on businesses.
Unlike the Covid relief packages of recent years, there would be no direct payments or checks in the mail for large groups of people. So what’s in it for ordinary Americans? Here’s an overview.
Medicare out-of-pocket cap, free vaccines
For the first time, Medicare beneficiaries’ annual out-of-pocket drug spending would be capped at $2,000 from 2025. Today there is no limit. Medicare seniors would also have the option to spread the cost over the monthly payments.
The average Medicare recipient spent $5,460 in 2016 on out-of-pocket costs, such as deductibles and out-of-pocket payments, according to a study by the impartial Kaiser Family Foundation.
In addition, the bill would grant them recommended vaccines for free, including vaccines against Covid and shingles.
Clean Vehicle Credit
Do you want to buy an electric car? The account would provide credit of up to $7,500 for qualified “clean” vehicles, including popular models from General Motors, Tesla, and others.
The credit would drop for vehicles that fail to meet all electrical and mineral or battery component requirements, according to details provided to NBC News by the Senate Finance Committee.
It would apply to new vehicles costing up to $55,000 — or $80,000 in the case of SUVs and vans. And you would need to earn less than $150,000 in income (or $300,000 for joint filers) to qualify.
There’s a catch: the benefit would be reduced or eliminated unless a vehicle is sold by a “qualified manufacturer” and final assembly was done in North America to boost domestic production.
For previously owned electric vehicles that are at least two years old and sell for $25,000 or less, there would be a credit of up to $4,000 — allowed for individual incomes up to $75,000 — according to an analysis from the Bipartisan Policy Center.
Energy-efficient credits for the home
The bill includes a number of benefits to encourage the use of clean energy products in homes over the next decade.
It would increase the credit for installing qualified goods – such as: Energy Star Products — for non-commercial properties from 10% to 30%. That includes “solar electric, solar water heating, fuel cell and small wind and geothermal heat pumps,” according to the Senate Finance Committee.
The legislation would replace a lifetime credit limit with a $1,200 annual credit cap, with $600 for energy-efficient windows and $500 for doors. That would add up to $2,000 for biomass stoves and heat pumps. It would also enhance existing credits to cover home energy audits (up to $150) and upgrade electrical panels (up to $600).
Medicare $35 maandelijkse Monthly Insulin Limit
For Medicare beneficiaries, the legislation would impose a $35 monthly cap on the cost of covered insulin products beginning in 2023.
A Study Health Affairs last month, it was found that 41% of people who use insulin were on Medicare. Overall, 14% of those taking insulin said they spend “catastrophic” amounts of money on insulin — more than 40% of their remaining income after paying for food and housing.
Democrats also tried to limit insulin costs in the private market to $35, but Republicans objected and the provision was dropped under the Senate’s strict budget rules to pass the bill. Subsequent attempts to add it were unsuccessful.
Affordable Healthcare Financing Act
The bill would prevent a sharp increase in health insurance premiums for plans under the Affordable Care Act due next year by extending the increased funding for the ACA approved under the US bailout plan for another three years, until the end. 2025. That means the additional aid will continue to be available to Americans with incomes above 400% of the federal poverty level, with premiums capped at 8.5% of household income for “benchmark” plans.
It wouldn’t be a sticker shock this fall for millions of people who would otherwise face premium hikes as a result of the money drying up, a prospect many Democrats were nervous about going into the November 8 midterm elections.