The Inflation Reduction Act, a $430 billion bill focused on lowering healthcare costs, promoting clean energy and increasing corporate taxes, passed the U.S. Senate on Sunday and is expected to pass the House of Representatives as soon as Friday.
Democrats who wrote and were the sole supporters of the bill, led by President Joe Biden, have touted the impact it could have on costs for many Americans, who have been hit this year with the highest inflation in decades.
Here's how and when key policies in the bill will have an impact on everyday people.
HEALTHCARE + Affordable Care Act premiums: At the end of this year, 13 million Americans would have seen their Affordable Care Act premiums increase, after subsidies expanded in COVID-19 spending bills expired. The bill extends those subsidies until 2024, and Democrats say they will save each individual $800.
+ Cap on drug costs for senior citizens: Starting in 2025, the bill caps the amount that millions of senior citizens who receive Medicare will pay in annual drug costs at $2,000.
+ Lower drug prices: These won't be felt in American wallets until 2026. The U.S. government will start negotiating the price charged for the top 10 most-used drugs with pharmaceutical companies in 2025.
ENERGY + Electric vehicle credits: Some car buyers may be able to redeem rebates for buying electric vehicles at auto dealerships as soon as this year, including $7,500 for new and $4,000 for used vehicles, depending on income. The U.S. Treasury needs to write regulations on that income verification and the administration needs to specify exactly which vehicles qualify under battery sourcing and critical minerals rules.
+ Homeowner credits: The bill provides $4.28 billion in home rebate programs that will be administered in each state, which have to establish guidelines, such as income limits. The program includes up to $1,750 rebates for heat pump water heaters, up to $8,000 for heat pump systems for heating, ventilation and air conditioning (HVAC), and additional rebates for upgrading electrical panels and improving insulation. The program runs through Sept. 30, 2031.
+ Solar panels and solar battery systems: Homeowners who install residential solar panels or solar battery systems will qualify for a 30% tax credit for installations until Dec. 31, 2034. The credits will be made available after respective states design the rules of the program. (Reporting by Jarrett Renshaw, David Shepardson and Heather Timmons; Editing by Mary Milliken and Kenneth Maxwell)