Warner & Kaine Celebrate One Year Anniversary of Inflation Reduction Act Becoming Law
WASHINGTON, D.C. – Today, U.S. Senators Mark R. Warner and Tim Kaine celebrated the one year anniversary of the Inflation Reduction Act becoming law. Last August, the senators voted to pass the Inflation Reduction Act, legislation to lower health care and prescription drug costs, bring down energy bills, and tackle climate change—all while lowering the deficit.
“From capping the cost of insulin to $35 per month for seniors on Medicare to helping more families make energy efficient home improvements, the Inflation Reduction Act is already lowering costs for hundreds of thousands of Virginians in the year since it became law,” said the senators. “In the years ahead, we look forward to seeing the law’s impacts, including a $2,000 annual cap on out-of-pocket costs for prescription drugs for Medicare recipients. We remain committed to making sure communities across Virginia continue to benefit from the law’s many provisions.”
Below is a list of provisions that have already taken effect in the year since the law was enacted.
- Black lung benefits: The law permanently extends the black lung excise tax at a higher rate, providing more certainty for miners, miner retirees, and their families who rely on the fund to access benefits. In Virginia, thousands of miners and their families have received benefits through the trust fund since it was established, including approximately 2,600 Virginians in 2021. Watch here to learn more about what this means for miners and miner retirees like Mr. James Gibbs, a Bristol native, the At-Large International Vice President of the United Mine Workers of America (UMWA), and Kaine's guest to the 2023 State of the Union.
- $35 cap on the cost of insulin: Out-of-pocket costs for insulin—regardless of how much a patient needs—is capped at $35 per month under Medicare. Thanks to the Inflation Reduction Act, 36,461 Virginians on Medicare who use insulin now pay no more than $35 per month. Click here to learn how seniors like Mrs. Marguerite Bailey Young of Fredericksburg, who was Warner’s guest to the 2023 State of the Union, are benefiting from the $35 cap.
- Free vaccines for Medicare recipients: People with Medicare no longer have to pay to receive vaccines under Medicare Part D, which includes vaccines for shingles, HPV, MMR, diphtheria, and pertussis. 1,095,331 Virginia seniors on Medicare are able to receive the shingles vaccine and other recommended vaccines at no cost.
- Extension of ACA subsidies: During the pandemic, Congress enhanced subsidies under the Affordable Care Act (ACA) to help lower health care premiums for millions of Americans. The Inflation Reduction Act extended these enhanced subsidies through 2025 to help make Virginians’ health insurance more affordable. 304,469 Virginians with ACA coverage are receiving assistance to lower the cost of their premium. In 2022, Virginians saved an average of $508 per month on their health insurance premium.
- Penalties on drug manufacturers that increase prices: Manufacturers are required to keep the increase in the cost of their drugs at or below inflation.
- Boosts to clean energy investments: Clean energy manufacturers can apply for expanded tax credits that incentivize investment in and production of renewable energy technologies like solar power and offshore wind. The Inflation Reduction Act set aside $4 billion in credits for businesses that make these investments in energy communities that have seen closures of coal mines or retirements of coal-fired power plants in recent years. This means that communities in Virginia, especially Southwest Virginia, are well-positioned to benefit from many of these tax credits and funding opportunities.
- Improvements to home energy efficiency: Homeowners can receive up to 30 percent back through tax credits for making energy efficiency improvements to their home—generally up to a maximum of $1,200 per year but potentially up to $3,200 if improvements include heat pumps, heat pump water heaters, or biomass stoves.
- Increased access to electric vehicles: Qualified individuals can get up to a $7,500 consumer credit for the purchase of new electric vehicles. There are additional incentives to help ensure those vehicles are produced in North America. Qualified individuals can receive a tax credit of up to $4,000 for certain used electric vehicles and plug-in hybrids purchased through a dealership. In order to qualify for the full value of the credit, the vehicle must: have a battery capacity of at least 7kW hours; generally be a model at least two years old; and be sold by a participating dealer that is licensed in the jurisdiction. For new vehicles, eligible taxpayers include single filers with incomes under $150,000 annually and households with joint incomes under $300,000 annually if the head of household earns under $225,000 annually. The vehicle’s price is limited to $55,000 for compact vehicles and $80,000 for SUVs, vans, and pick-ups. For used EVs, single filers must have an income under $75,000 annually or $150,000 as a household, as long as the head of household makes under $112,500 annually. The used vehicle’s price is limited to $25,000.
While many provisions in the Inflation Reduction Act have already been implemented, there are additional provisions that will begin later this year or in the years to come.
- Medicare drug price negotiation: On September 1, 2023, the Centers for Medicare & Medicaid Services (CMS) will release a list of the first 10 drugs covered under Part D eligible for the Medicare drug price negotiation program. The Inflation Reduction Act provided Medicare with the ability to negotiate lower prescription drug prices for the first time in history. The negotiated prices will go into effect in 2026.
- Free vaccines for Medicaid recipients: On October 1, 2023, Medicaid and CHIP will cover vaccines for Medicaid-covered adults. Currently, vaccine coverage is optional for states. 2,040,696 Virginia Medicaid recipients will have access to expanded vaccine coverage.
- Cap on out-of-pocket costs on prescription drugs: Beginning in 2025, there will be a $2,000 cap on out-of-pocket costs on prescription drugs for seniors covered under Medicare Part D. Some estimates have shown that Virginia seniors on Medicare will save an average of $440.62 on out-of-pocket costs on prescription drugs thanks to this cap. Watch here to hear what this cap will mean for seniors like Mr. Irv Varkonyi from Fairfax.