What it means now that the Inflation Reduction Act has been signed into law

Published: Aug. 16, 2022 at 7:19 PM CDT
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JACKSON COUNTY, Mo. (KCTV) - President Joe Biden signed the Inflation Reduction Act today. But, what exactly does that mean for you?

“The inflation reduction act is groundbreaking,” said Professor Ann Marie Marciarille with the UMKC School of Law. She teaches Health Law and Health Care Regulation courses.

Marciarille said she’s excited about the many changes the act will bring.

That starts with those on Medicare, the federal health insurance program that covers millions and millions of Americans - mostly senior citizens 65 and older.

Out-of-pocket drug costs for Medicare Part D beneficiaries will be capped at $2,000 per year. That change is set to start in 2025.

Starting in 2023, out-of-pocket insulin costs will be capped at $35 per month for Medicare beneficiaries.

The act will also allow Medicare to negotiate the prices of prescription drugs directly with drug makers.

“None of this will happen tomorrow, which means - sadly - none of this is immediate relief for someone staggering under tremendous debt or a family is staggering,” said Marciarille.”When it does begin to roll out, it’s also gradual.”

From medical to climate, the act provides almost $400 billion to fund energy and climate projects aimed at reducing carbon emissions by 40% in 2030.

There are many incentives for consumers who purchase technologies to lower emissions and energy prices, starting with homeowners looking to make changes to their house.

It includes $9 billion in consumer home energy rebate programs. For example, homeowners can get a tax credit up to 30% for the costs of installing solar, wind and other renewable energy systems.

For those looking to purchase a new vehicle, there’s a $4,000 consumer tax credit to purchase used electric vehicles and a $7,500 dollar tax credit to buy new clean vehicles. Both are available only to lower- and middle-income individuals.

For the many rural communities here in Kansas and Missouri, the plan invests more than $20 billion in various grants to farmers taking up practices to lower greenhouse emissions.

Lastly, from the farms to the corporate world, the legislation sets a minimum 15% corporate tax rate for most large companies and provides $80 billion in funding to the IRS for hiring agents and revamping tech systems.