How the Healthcare and Climate Bill May Affect You

The landmark legislation is designed to propel the U.S. toward climate goals. But here’s what it means for your healthcare costs.

man reviewing his medications and healthcare plan

Updated on February 5, 2024.

Millions of Americans may benefit from the landmark Inflation Reduction Act of 2022, which was passed by the U.S. House of Representatives in August 2022 after being approved by the Senate. It’s the largest investment in energy security and climate action in U.S. history.

President Biden signed the sweeping package into law to combat climate change, tackle the high cost of prescription drugs, enforce the tax code more fairly, and lower the federal deficit by $305 billion through 2031. The legislation allocates nearly $370 billion for the reduction of greenhouse gas emissions to 40 percent below their 2005 levels by the end of this decade. The bill bolsters the production of clean energy, offering tax credits for Americans to help them transition to cheaper, more sustainable energy sources, such as electric vehicles and solar power. 

Mounting research shows that climate change is affecting health in a variety of ways, including increasing the risk for heat-related illness, mental health consequences and the worsening of existing health issues, such as diabetes. Actions aimed at slowing climate change can help safeguard human health, helping to alleviate these long-term effects.

But the Inflation Reduction Act was also designed to trigger other near-term healthcare changes. Here is how the bill may affect you directly:

Lower prescription drug prices: Under the Inflation Reduction Act, certain costly and commonly used prescription drugs are more affordable for more than 63 million people covered by Medicare. The bill empowers the Department of Health and Human Services (HHS) to negotiate with drug companies—something that has been prohibited for nearly two decades. Initially, the agency is required to negotiate the cost of 10 drugs in 2026. This will be expanded to include up to 20 drugs over time.

The bill caps out-of-pocket prescription drug costs for seniors at $2,000 annually, starting in 2025. These costs can also be broken up into more affordable payment plans.

Meanwhile, drug companies that raise the cost of medications above the rate of inflation now face penalties. As of October 2022, these companies must pay a rebate to Medicare for Part B drugs. And since April 2023, they must also pay a rebate for Part D drugs.

Free vaccines for adults on Medicaid. The landmark bill ensures Medicaid recipients have access to all recommended vaccines at no out-of-pocket costs.

Lower health care premiums for millions: The Inflation Reduction Act extends Affordable Care Act (ACA) marketplace subsidies until 2025. These subsidies, which were set to expire in 2023, enabled 7 million more people qualify for no-cost health insurance. They also help average families save hundreds of dollars per year on their healthcare premiums. Extending subsidies—and ensuring that ACA marketplace coverage is more affordable—is helping to prevent roughly three million people from losing their healthcare coverage, according to an analysis by the Robert Wood Johnson Foundation.

A monthly cap on insulin costs for those with Medicare: Some 7.4 million Americans with diabetes rely on insulin to manage their condition. But the average list price for the drug jumped 11 percent per year between 2001 and 2018. Insulin costs can spike to $900 monthly for uninsured people who are paying full price for the drug. High costs of the drug may cause people to  ration their intake, making it harder for them to manage their disease and prevent serious complications.

“One in every three dollars spent on drugs in the U.S. is spent on someone with diabetes, said Lisa Murdock, the ADA’s chief advocacy officer in a July 28 statement. 

Under the Inflation Reduction Act, the price for insulin is limited to no more than $35 per month in out-of-pocket costs for Medicare patients.

Article sources open article sources

U.S. Senate. SUMMARY: THE INFLATION REDUCTION ACT OF 2022. Accessed Aug 8, 2022.
Committee for a Responsible Federal Budget. What's In the Inflation Reduction Act? Jul 28, 2022.
Bob Casey U.S. Senator, Pennsylvania. Casey Applauds Senate Passage of Inflation Reduction Act, Historic Bill to Lower Costs for Families and Tackle Climate Crisis. Aug 7, 2022.
American Public Health Association. Public Health Opportunities to Address the Health Effects of Climate Change. Accessed Aug 8, 2022.
Robert Wood Johnson Foundation. What if the American Rescue Plan Act Premium Tax Credits Expire? Apr 7, 2022.
Insulin — the new battleground for drug pricing. Nat Biotechnol 40, 1 (2022).
American Diabetes Association. American Diabetes Association Announces Support for Changes to the Inflation Reduction Act. Jul 28, 2022.

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