In August, Democrats in Congress passed the Inflation Reduction Act (IRA), an historic piece of legislation that builds upon progressive victories in the American Rescue Plan and the Infrastructure Investment and Jobs Act. President Biden signed it into law this week. Here’s what you should know about how this landmark piece of legislation will impact Americans from their wallets to their wellbeing.
It lowers healthcare and life-saving drug costs for millions
Millions of older Americans (and especially Black and brown seniors) struggle to afford the prescription drugs they need to live. But soon, the IRA will bring about some safeguards to ever-mounting prescription drug costs. Beginning in 2025, people on Medicare will not pay more than $2,000 out-of-pocket for prescription drugs. This will be lifesaving for older Americans who tend to both need more medications and be on fixed incomes.
That’s not the only way the bill will help seniors. Medicare will also be able to negotiate the prices of certain high-cost prescription drugs, further helping tamp down medication costs. And, the IRA caps the cost of insulin for Medicare recipients at $35. It’s worth noting that the Democrats tried to add a provision that would apply this same cap for those under private insurance—a cost-savings that would have been particularly helpful to Latinos, who are 70% more likely to be diagnosed with diabetes. But the GOP pulled out all the stops to protect Big Pharma over people and had it scrapped from the bill.
In addition to making medications more affordable, the IRA ensures nearly 13 million Americans will continue to benefit from a provision in Biden’s American Rescue Plan that lowered monthly coverage premiums for those with healthcare through the Affordable Care Act (ACA). This means ACA enrollees will continue to see lower monthly payments put in place in response to the COVID-19 pandemic through 2025.
It’s the largest investment in our climate ever
The IRA will also mean a greener future for all Americans. Among other things, the bill provides subsidies to encourage companies to move away from fossil fuels and towards renewable energy. Tax rebates on solar panels and similar technologies will allow more American families to make their homes energy-efficient while also reducing their monthly energy bills. Critically, the bill also contains provisions aimed at punishing the private corporations that account for the majority of this country’s carbon emissions. This is the long-game we need to be playing to ensure generations to come inherit a livable world.
It’s paid for by making corporations pay what they owe
These policies to keep people healthy, make life more affordable, and protect our planet are fully paid for by making corporations pay what they owe and ensuring 98% of households (those making less than $400,000 a year) don’t pay a dime more in taxes.
The IRA will generate revenue in two key ways:
- Implementing a 15% minimum tax rate for corporations making at least $1 billion in profits annually.
- Dedicating resources to the Internal Revenue Service (IRS) to make sure the rich aren’t getting away with breaking tax law.
It’s a lesson to keep organizing in the streets and to the polls
While imperfect, the Inflation Reduction Act is yet another example of how our allies in Congress have heard our calls and showed up for working families. None of these big changes would have been possible without movements. Grassroots organizations like Virginia Organizing have long been calling on those in power to take action on price-gouging for prescription drugs. And Kentuckians for the Commonwealth were sounding the alarm on climate change long before this summer’s disastrous flooding in their state.
By passing the Inflation Reduction Act, we proved that together, we’re stronger than greed. And that will carry us through as we continue the fight to win on urgent issues like child care, affordable housing, the child tax credit and immigration. Indeed, the IRA is a timely reminder that regular Americans can affect major change by electing champions for an economy that works for all of us and making their voices heard both at the ballot box and in the streets.