The climate and “infrastructure” bill signed by President Joe Biden in August has many upgrades for healthcare.
- President Joe Biden signed the Inflation Reduction Act that will pour hundreds of billions of dollars into the clean-energy projects needed to decarbonize the economy.
- This bill will not only help with climate change but many other things as well.
- Along with climate change, the other main spending portion of the bill is healthcare.
Why it’s news
The bill sets out to reduce Americans’ medical costs in two main ways. First, it uses federal subsidies to reduce the cost of both health insurance and prescription drugs. Second, the bill gives Medicare officials the power to negotiate with pharmaceutical companies, which will likely reduce the price that the companies charge for those drugs, reports The New York Times.
The bill’s benefits will mainly help the poor, working-class, and middle-class families. Its costs will be supported by increases in corporate taxes and reductions in the profits of pharmaceutical companies.
Some critics of the bill have argued that these profit reductions will lead pharmaceutical companies to spend less money developing future drugs and, in turn, to fewer promising treatments. The Congressional Budget Office estimates that the law will reduce the number of new drugs introduced over the next 30 years by about 1%, says Leonhardt.
A breakdown of the bill:
- The bill will allow Medicare officials to negotiate drug costs, giving companies less freedom to set high prices.
- It will set a $2,000 annual cap on the amount of money that any senior pays for drugs.
- It will cap out-of-pocket insulin expenses at $35 a month for people in Medicare. It will also make adult vaccines free for seniors and medicare users.
- For middle- and lower-income people who buy private health insurance plans through the Obamacare exchanges, federal subsidies will increase for three years.