Hi Indivisibles,

I’m Andrew O'Neill, the Associate Director for Economic Justice Policy at Indivisible. I’m taking over our email today to write a bit about the Inflation Reduction Act (IRA), which passed Congress and was signed into law by President Biden. 

You’ve seen and heard a lot from Indivisible about the significance of the IRA because it really is a BFD. President Biden and Congressional Democrats delivered on a critical set of campaign promises, including the largest ever investment in climate action and green energy in history -- investments that could not be more urgent! It’s important to celebrate the huge benefits of this bill and the fact that it’s Democrats who made it happen. Remember, not a single Republican voted for this bill. 

Today I want to dive a little bit deeper into some really important provisions of this law that strengthen our healthcare system, reduce insurance premiums and prescription drug costs, and make needed improvements to Medicare. These policies might directly benefit you, or a loved one, or a neighbor, but regardless of who it is, these policies will directly affect every community in this country. Our healthcare is profoundly personal, and unfortunately, it also takes up a huge slice of our household budgets, which means this law will literally be life-changing for millions of folks. 

The IRA strengthens the Affordable Care Act (ACA) -- President Obama’s signature legislation receives a boost from his former Vice President. 

A key feature of the ACA is that the government provides subsidies to folks who don’t have employer-sponsored health insurance to help them afford insurance from the ACA marketplace. The American Rescue Plan provided a temporary boost to these subsidies, saving the average person buying insurance from the exchange $800 per year. 

But these were temporary and about to expire. Millions of people were on the brink of paying higher premiums, and an estimated 3 million people would have been unable to afford their insurance at all. Now, these increased subsidies have been extended through 2025, a lifeline to folks who rely on marketplace coverage to provide health and security for their families.

The IRA invests in Medicare and reduces costs for seniors. 

For the first time in history, Medicare will be able to negotiate the costs of some prescription drugs with the Big Pharma companies who manufacture them instead of being forced to pay sky-high prices. This could result in thousands of dollars less in prescription drug costs for some older adults. We’ve watched Big Pharma jack up their prices simply to rake in higher profits -- but under the IRA, they will have to give a discount to Medicare for price increases higher than the rate of inflation. That’s huge. Too many people are forced to make impossible financial decisions simply because their prescriptions are too expensive. 

In addition to lowering the cost of prescriptions under Medicare, for folks on Medicare Part D (a prescription insurance program for Medicare recipients), the IRA will:

• Place a $2,000 out-of-pocket maximum on Part D, putting a ceiling on the amount of money seniors can be required to pay each year;
• Cap monthly out-of-pocket costs at just $35 for the Insulin millions of Americans rely on;
• Guarantee that all vaccines will be totally free.

Whew, you made it through the wonky details (thanks for nerding out with me). Now I can tell you why this is such a big deal. 

Big Pharma is Big Mad. 

When Medicare Part D was created in 2003 (remember, George W. Bush was president and Republicans controlled both chambers of Congress), it included a huge giveaway to Big Pharma -- Medicare was explicitly forbidden from negotiating prices for prescription drugs. This was in spite of Veterans Affairs already doing this for its healthcare program. Pharmaceutical companies basically got the green light to keep raising their prices, forcing seniors to foot the bill. 

Seems like a bad deal, right? Why didn’t we change it sooner? Well, Big Pharma has the resources to spend HUGE amounts of money lobbying against changes. When I say huge, I mean really, really huge. In 2020, just one year, pharmaceutical companies spent nearly $360 million lobbying Congress and the administration. That’s essentially $1 million every day -- assuming they took a few days off to enjoy their yachts and private jets. 

This context is important because this is what Democrats were up against, and they delivered. They passed a bill that begins to rein in Big Pharma’s greed while creating incredible savings for Americans. Of course, there’s more to be done, but we’ve broken through their armor and shown that Democrats are ready to take on big fights and win. 

If we want to continue standing up to Big Pharma and driving down prescription drug prices, if we want to keep investing in climate action and closing tax loopholes for the ultra-wealthy, then we need to ensure a win in November. Remember: Not a single Republican voted for the IRA. This historic achievement was only possible because of a slim Democratic trifecta. 

Sign up for Give No Ground and volunteer for the next two months in order to hold that trifecta. Indivisibles all across the country will be focusing on ten key races we’ve identified as battlegrounds to save our democracy. Come be a part of the movement to ensure Democrats have the power to enact meaningful change, and MAGA Republicans can’t move their extremist policies through Congress. With a big win in November, the IRA is just the tip of the iceberg.

Thanks for sticking with me today. Detailed explanations of policy are kind of my jam. With a little bit of context, it’s clear the IRA’s passage was an incredible achievement, and I’m excited to continue fighting for more change with you in the future. 

In solidarity,

Andrew O’Neill
Associate Director for Economic Justice Policy
Indivisible

P.S. We don’t do these types of deep-dive explainers often. If this kind of thing felt useful and informative for you, tell us by replying to this email so we know that we should add more of these to our programming.