08 August 2022 Senate approves Inflation Reduction Act including key health care provisions Includes three-year extension of enhanced ACA subsidies, the ability for Medicare to negotiate drug prices and $35 monthly insulin caps for Medicare, among other items On August 7, the Senate approved 51-50 the Inflation Reduction Act (IRA) of 2022 (H.R. 5376), on a party line vote with Vice President Harris breaking the tie to send the Democrat's long-pursued reconciliation bill to the House. The bill includes climate and energy provisions and an extension of enhanced Affordable Care Act (ACA) subsidies paid for by a 15% corporate alternative minimum tax (CAMT) on adjusted financial statement income for corporations with profits over $1 billion, a stock buyback tax, increased IRS enforcement funding, and prescription drug provisions, including permitting Medicare to negotiate certain prescription drug prices. The House is planning to reconvene on Friday, August 12 to consider the Senate bill. President Biden said in a statement after passage that, "Senate Democrats sided with American families over special interests, voting to lower the cost of prescription drugs, health insurance, and everyday energy costs and reduce the deficit, while making the wealthiest corporations finally pay their fair share." Senate Republican Leader Mitch McConnell (R-KY) also issued a statement saying that, "Democrats have proven over and over they simply do not care about middle-class families' priorities. They have spent 18 months proving that. They just spent hundreds of billions of dollars to prove it again." Congressional Democratic leaders, however, applauded the legislation and urged its quick passage in the House. Energy and Commerce Frank Pallone (D-NJ) called it "one of the most significant pieces of health care legislation to move through Congress in over a decade." Prescription drug provisions in the bill include the establishment of a Drug Price Negotiation program within Medicare, prescription drug inflation rebates, a redesign of the Part D benefit, and a $35 monthly caps on out-of-pocket costs for insulin for Medicare beneficiaries. The bill also extends the enhanced ACA subsidies established in the American Rescue Plan Act (ARPA) for three years — through 2025. According to the Congressional Budget Office (CBO), extending the ARPA policy would result in about 4.8 million more people having marketplace coverage and is expected to cost $64 billion. The drug pricing provisions are projected to save $288 billion over a decade, however, a provision struck by the Senate parliamentarian — which would have included the commercial market in the inflationary rebate calculation — could reduce the savings by around $40 billion. The CBO also predicted the bill will lead to higher drug launch prices to offset losses from inflation rebates and Medicare price negotiation. Throughout the "vote-a-rama," a lengthy series of proposed amendments, Republicans were also able to strike from the final bill a provision that would have capped out-of-pocket insulin costs for individuals with private insurance, leaving the cap in place for just Medicare beneficiaries. The Senate parliamentarian ruled that the cap did not comply with the rules of reconciliation and thus would have needed 60 votes to keep it in the bill. In several instances, Democratic leaders called for opposing Democratic amendments — including those addressing the Medicaid coverage gap and strengthening the Medicare price negotiation provision — in an effort to preserve the IRA and keep the deals reached with key Senators Joe Manchin (D-WV) and Kyrsten Sinema (D-AZ) intact.
Document ID: 2022-1200 | |||||||
