August 01, 2022

“The Inflation Reduction Act of 2022” Renews Hope for Action to Lower Drug Prices

A surprise announcement on Wednesday from Sens. Chuck Schumer (NY) and Joe Manchin (WV) revived hopes for Democrats to pass significant legislation on a range of issues, including prescription drug prices, climate, energy, and health policy.

Central to the deal dubbed “The Inflation Reduction Act of 2022” is the prescription drug pricing reform that includes allowing Medicare to negotiate drug prices, as well as a $2,000 annual out-of-pocket cap on drug costs for beneficiaries under Medicare Part D. Senate Democrats are looking to add insulin measures to the deal.

Additionally, the agreement includes three years of additional subsidies for Affordable Care Act premiums, a boost from the two years that Sen. Manchin previously approved.

The deal also includes provisions that Democrats previously thought they had lost that address climate change and tax policy. In addition to imposing a corporate minimum tax of 15 percent, the agreement calls for nearly $400 billion in domestic energy and manufacturing investments that will curb carbon emissions.

Overall, the bill is expected to reduce the national deficit by $300 billion and help address inflation. Democrats will likely look to push this bill forward as quickly as possible.

Democrats still need the support of Sen. Kyrsten Sinema (AZ), who has previously voiced opposition to tax increases.

“The deal is very promising. We hope to make the 57th Medicare anniversary summer a historic occasion,” said President Roach. “We’ve been waiting for a deal that includes Medicare drug price negotiation for decades.”

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Topics: Retirement Security

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