Senate Introduces Inflation Reduction Act of 2022

August 1, 2022

On July 27, Senate Democrats introduced the Inflation Reduction Act of 2022, which contains provisions to counter inflation, lower prescription drug prices and health insurance costs, and address energy and climate change issues. Democrats estimate that the bill would generate $739 billion in revenue, invest $433 billion in spending, and reduce the Federal deficit by $300 billion. Congressional leaders plan to advance the bill via the budget reconciliation process, which requires 50 votes in the Senate and a simple majority in the House. The Senate is expected to hold a vote on the bill this week.

The Inflation Reduction Act of 2022 contains the following provisions:

  • Affordable Care Act (ACA) premium tax credits: The bill extends the enhanced and expanded eligibility for ACA premium tax credits, enacted in the American Rescue Plan Act of 2021, for three additional years, from 2023-25
  • Prescription drug pricing: The bill enables the Federal government to negotiate prices for some high-cost drugs covered under Medicare, requires drug companies to pay rebates if drug prices rise faster than inflation, and creates a $2,000 out-of-pocket cap for Part D beneficiaries, among other drug pricing provisions
  • Taxes: The bill implements a 15% corporate minimum tax and strengthens Internal Revenue Service enforcement of the tax code
  • Climate and energy security: The bill invests in programs to lower energy costs, increase cleaner production, and reduce carbon emissions

GNYHA supports the bill’s provisions that would lower health care costs for individuals and families. In coordination with 1199SEIU United Health Care Workers East, we strongly advocated for the extension of the enhanced ACA premium tax credits, which would prevent an increase in premiums and the number of uninsured individuals.

The Inflation Reduction Act of 2022 is a significantly scaled-down version of the Build Back Better Act that passed the House last November. Senate Majority Leader Chuck Schumer (D-NY) and Senator Joe Manchin (D-WV) have been the key negotiators in reconciliation negotiations. Senate passage of the Inflation Reduction Act of 2022 will require unanimous consensus among Democrats, leaving little room for error. If passed by the Senate, the House would need to reconvene during the August recess and hold a vote on the bill. Given Democrats’ narrow majorities and members’ ideological differences in both chambers, final passage of the bill remains extremely fluid.

Please see ML-49 for additional details about the Inflation Reduction Act of 2022.