President Joe Biden signed the Inflation Reduction Act into law on Aug. 16, legislation which has largely been touted as a climate and energy bill. But there are some other major components of the act which will affect Americans and their wallets, particularly as concerns healthcare and increased funding for the Internal Revenue Service (IRS).
Prescription Drug Costs Could Go Down for Medicare Beneficiaries
First, the act will help cut prescription drug costs — a financial burden for many Americans, as they pay two to three times what citizens of other countries pay for them, according to a White House fact sheet. A July Kaiser Family Foundation survey found that half of U.S. adults say they have difficulty affording healthcare costs, and about 40% say they have delayed or gone without medical care in the last year due to cost.
Under the act, around 5 to 7 million Medicare beneficiaries could see lower prescription drug costs as the act includes a provision allowing Medicare to negotiate them, per the White House.
In addition, 50 million Americans with Medicare Part D “will have the peace of mind knowing their costs at the pharmacy are capped at $2,000 per year, directly benefiting about 1.4 million beneficiaries each year,” according to the fact sheet. And in another win, 3.3 million Medicare beneficiaries with diabetes will have their insulin costs capped at $35 for a month’s supply.
Sen. Joe Manchin, who played a crucial role in the passage of the act after a stunning reversal, tweeted on Aug. 16 that “The Inflation Reduction Act has been signed into law. It will address record inflation by paying down our national debt, lowering healthcare costs, & increasing American energy production to provide relief at the pump & bolster energy security.”
American Care Act Subsidies Extended Through 2025
Another provision under the act is the extension of American Care Act (ACA) subsidies through 2025.
“The extension prevents out-of-pocket premium payments from rising across the board next year for virtually all 13 million subsidized ACA plan enrollees,” the Kaiser Family Foundation tweeted.
IRS Offered $80 Billion in Additional Funding
Another “non-green” portion of the act is the increased funding for the IRS, which will invest $80 billion over the next 10 years for tax enforcement and compliance. The Congressional Budget Office (CBO) estimates the IRS will collect $203 billion over the next decade as a result of these changes, according to a summary of the act.
In a letter sent to IRS Commissioner Charles P. Rettig, Treasury Secretary Janet Yellen said she supported the funding to “improve taxpayer service, modernize outdated technological infrastructure, and increase equity in the tax system by enforcing the tax laws against those high-earners, large corporations, and complex partnerships who today do not pay what they owe,” according to a press release.
Yellen also reiterated the administration’s promise to not increase audit rates on Americans making under $400,000 a year, adding that on the contrary, they will experience fewer audits thanks to improved technology and customer service.
“Specifically, I direct that any additional resources — including any new personnel or auditors that are hired — shall not be used to increase the share of small business or households below the $400,000 threshold that are audited relative to historical levels. This means that, contrary to the misinformation from opponents of this legislation, small business or households earning $400,000 per year or less will not see an increase in the chances that they are audited,” Yellen said in the letter.
More From GOBankingRates
This article originally appeared on GOBankingRates.com: Biden Signs Inflation Reduction Act: Here Are the Biggest Non-Green Issues That Will Impact Your Wallet