The Senate on Sunday passed a nearly $700 billion bill which extends boosted Affordable Care Act subsidies and allows Medicare to negotiate some prescription drug pricing.
The Inflation Reduction Act, a slimmed-down version of President Joe Biden’s multitrillion-dollar Build Back Better bill, looked dead just weeks ago until Sen. Joe Manchin, D-W.Va., announced late last month that he had successfully negotiated with Democrats to pass it.
“Today, 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,” Biden said in a White House statement.
The bill extends premium ACA subsidies, which were originally granted by the American Rescue Act, into 2025. The extension comes after a record 14.5 million marketplace enrollees were lured by the enhanced premiums and roughly 13 million people were anticipating a premium increase at the end of this year.
With the bill, Medicare will also begin negotiating some pharmaceutical drug prices beginning in 2026, giving the federal government previously unimagined leverage against pharma manufacturers to lower drug prices. It also caps Medicare Part D out-of-pocket costs in 2025.
But while the bill extended ACA subsidies and extended Medicare’s power, Senate Republicans blocked a measure in the bill to cap insulin at $35 per month for Americans with private medical insurance.
The Inflation Reduction Act passed in a 51-50 vote, with Vice President Kamala Harris casting the tie-breaking vote. The House, in the midst of its summer recess, plans to meet Friday to pass the bill and send the act to Biden’s desk for signing.