The US Capitol Building in Washington, DC.
The US Capitol Building with its reflection showing on glass in Washington, DC. Credit: Orhan Cam / Shutterstock

The US Senate narrowly passed a bill Sunday that will cut costs for consumers, create a new tax on wealthy corporations, lower drug prices for Medicare recipients and make $300 billion in investments in clean energy.

The bill dubbed “The Inflation Reduction Act” will empower Medicare to negotiate prescription drug prices, cap out-of-pocket costs for Medicare beneficiaries, and extend the federal Advance Premium Tax Credits, which reduced health care premiums by millions of dollars for residents of Connecticut.

Connecticut had received $85 million in additional federal funds over the past two years to reduce premiums costs for customers who received subsidies through Access Health CT. Those funds were expected to disappear next year, which is one of the reasons health insurance companies cited for needing to increase premiums in 2023. Those funds will now be available through 2024.

“We are also pleased that the bill will keep health insurance affordable for millions of Americans who purchase their coverage in the marketplace, especially consumers aged 50-64 – more than one million of whom have gained more affordable options,” Jo Ann Jenkins, AARP Chief Executive Officer, said.

The bill will also cap annual out-of-pocket prescription drug costs in Medicare Part D at $2,000 and cap co-pays for insulin to no more than $35 per month in Part D. 

“This bill will save Medicare hundreds of billions of dollars and give seniors peace of mind knowing there is an annual limit on what they must pay out-of-pocket for medications,” Jenkins said. “Lowering prescription drug prices is a top priority for Americans, with more than 80% of people across political parties supporting the measure.”

But attempts to control prices for 180 million Americans with private health insurance were scuttled by the Senate Parliamentarian, who ruled the provision to make sure drugmakers were penalized for hiking costs faster than inflation needed 60 votes. 

The bill also includes rebates for customers who purchase new electric appliances or retrofit their homes to be more energy efficient and it invests money into clean energy manufacturing. 

“For decades, Big Pharma and the fossil fuel lobby blocked every effort in Congress to shift power from these corporate elites to struggling Americans,” U.S. Sen. Chris Murphy said. “The Inflation Reduction Act will lower drug prices for seniors, cut health care costs, invest in clean energy, cut electricity costs, all while creating millions of jobs and making sure big corporations and the wealthy finally pay their fair share.”

In addition to health care and climate change, the bill also includes a 15% minimum tax on corporations making $1 billion or more in income and a 1% excise tax on stock buybacks.

“The legislation will close loopholes that allow the biggest corporations to avoid paying taxes and invest in IRS resources to prevent ultra-wealthy tax cheats from gaming the system at the expense of Middle Class Americans,” U.S. Sen. Richard Blumenthal said. 

In praising the bill, Blumenthal added: “Our bill will cut costs for consumers. It will help families better afford groceries, gas, and utilities while billionaire tax cheats will finally have to pay their fair share. Democrats have fought for years to allow Medicare to negotiate drug prices which will result in huge savings for seniors. This bill is the largest investment and most important action to fight climate change in history.”

After 16 hours of voting on amendments, Vice President Kamala Harris broke the tie, which now goes to the U.S. House where it’s expected to be passed later this week. 

Blumenthal and Murphy will hold a press conference with members of Connecticut’s AARP at 10:30 a.m. today at the Legislative Office Building in Hartford. 

The U.S. Senate won’t be back in session until Sept. 6.