President Joe Biden recently signed the Inflation Reduction Act (IRA) into law, and the health care subsidies written in the bill will stave the rising cost of premiums.
The Senate was split down the middle with all 50 Republican Senators voting against the bill. Vice President Kamala Harris broke the tie, and the bill passed the Senate on August 7th. Before its passage, Sen. Krysten Sinema (D-AZ) held up the bill at the last minute over a measure that would close a loophole allowing private equity managers and hedge fund executives to pay far lower tax rates than most taxpayers.
The House of Representatives went on to pass the bill on August 12th by a 220-207 margin – again garnering no Republican support.
President Biden remarked on the Republican opposition to the bill. “In this historic moment,” he said, “Democrats sided with the American people and every single Republican in the Congress sided with a special interest in this vote. Every single one.”
If the IRA died in Congress, millions of Americans would have experienced financial struggles due to their health care becoming more expensive or lost their access to health care entirely.
Among other provisions, the IRA extends premium subsidies provided by the American Rescue Plan Act for Affordable Care Act (ACA) recipients, narrowly meeting the August deadline put on Congress by insurers, who were eager to solidify the 2023 premium rates. Subsidies extended by the IRA will last until 2025.
“Without the extension, the vast majority of the 13 million people who get subsidies … would see premium payments rise,” said Krutika Amin, associate director for the Kaiser Family Foundation’s ACA program.
According to data from the Kaiser Family Foundation, some Americans would see their premiums rise by more than 50 percent if the extensions failed to pass, meaning households would have had to pay hundreds more a month for the same access to care they had been receiving.
American voters overwhelmingly support the extension of ACA subsidies. A Morning Consult/Politico survey in July showed that 2 out of 3 voters support the renewal of ACA subsidies. Seventy-one percent of voters said it was important to extend the ACA subsidies to address health care costs.
Nine out of ten Democrats support the renewal of ACA subsidies, according to the survey. Most independents (3 out of 5) are in favor of the extensions, and even a 49 percent plurality of Republicans express their support.
The IRA’s other health care measures include capping Medicare Part D out-of-pocket costs in 2025 and initiating negotiations between Medicare and select pharmaceutical companies about drug prices. The IRA has set aside a $64 billion share of funds to reduce health insurance costs, among other funding.
Some consider the IRA a shaved-down version of the $1.75 trillion Build Back Better bill Biden originally planned. Many measures were cut, including universal child care and tax cuts for the middle class, provisions that Biden wanted to see in the bill. Senate Republicans also blocked a measure that would cap insulin at $35 per month for Americans with private medical insurance.
Nevertheless, President Biden sees the IRA’s passing as a win. Before he signed the bill, Biden remarked, “With this law, the American people won and the special interests lost.”