WASHINGTON (Reuters) - The U.S. Senate on Sunday passed the Inflation Cut Act, a $430 billion bill focused on lowering health care costs, promoting clean energy and increasing corporate taxes, and is expected to be approved by the House of Representatives on Friday. .
The Democrats who wrote the bill and were its sole proponents, led by President Joe Biden, have touted the impact it could have on costs for many Americans, who this year experienced the highest inflation in decades.
Here's how and when the key policies in the bill will have an impact on ordinary people.
Health Care
- Affordable Care Act Premiums: At the end of this year, 13 million Americans could have seen Affordable Care Act premiums increase, after expanding subsidies in COVID-19 spending bills. The bill extends those subsidies until 2024, and Democrats say they will save $800 per capita.
- Maximum drug costs for seniors: As of 2025, the bill sets the amount that millions of seniors receiving Medicare will pay in annual drug costs at $2,000.
- Lower drug prices: won't be felt in US wallets until 2026. The US government will start negotiating the price charged for the top 10 used drugs with drug companies in 2025.
energy
- Electric Vehicle Credits: Some car buyers may be able to redeem rebates for electric vehicle purchases from auto dealerships as early as this year, including $7,500 for new and $4,000 for used cars, depending on income. The US Treasury needs to write regulations on income verification and the department needs to determine exactly which vehicles qualify under battery sourcing and critical mineral rules.
- Homeowner Credits: The bill provides $4.28 billion in home rebate programs to be administered in every state, which has to set guidelines, such as income limits. The program includes rebates of up to $1,750 for heat pump water heaters, up to $8,000 for HVAC heat pump systems, and additional discounts for upgrading electrical panels and improving insulation. The program runs until September 30, 2031.
- Solar Panels and Solar Battery Systems: Homeowners who install residential solar panels or solar battery systems will qualify for a 30% tax credit for installations through December 31, 2034. The credits will be made available after the respective countries design the rules for the program.
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