Inflation Reduction Act: Its Coverage and Benefits

The Inflation Reduction Act intends to combat inflation by providing benefits for clean energy and healthcare. In this article, read and find out more about the law and the benefits it has provided.

Clean Energy Benefits

The Inflation Reduction Act (IRA) was a bill authorized by the Congress and signed into law by the U.S. President Joe Biden. This law intends to combat the rising inflation and provide benefits for clean energy and healthcare. It lowered the costs of energy and prescription drugs, helped seniors against the high costs of living, and provided affordable healthcare. The IRA is expected to benefit individuals, families, and businesses, as reported by the U.S. Environmental Protection Agency.

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Clean Energy Benefits

According to Gray, the Inflation Reduction Act is the biggest climate and clean energy law in U.S. history. It helped the country reduce the emissions of carbon through its regulations on energy efficiency, environmental justice, and clean transportation. It has provided $369 billion for climate resiliency and clean energy where the funds were distributed either through tax credits, grants, and loan guarantees. 

In addition, the Inflation Reduction Act also had incentives to reduce the costs of renewable energy. It provided tax credits for energy efficiency and energy storage. The energy storage technologies include lithium ion batteries, wind turbines, and solar photovoltaic technology. It also provided tax credits for battery modules, electric vehicle packs, and the vehicles themselves. It made sure that the American-made electric vehicle batteries have a specific amount of minerals from the U.S. Lastly, it requires a supply chain for electric vehicles. Across North America, electric vehicle manufacturers had plans to spend $20 billion in building lithium-ion battery production facilities.

Healthcare Benefits

Gray also stated that the Inflation Reduction Act made healthcare more affordable especially for American families and seniors. The Committee on Finance says that the overcharging of pharmaceutical industries has contributed to inflation. However, under the IRA, the Secretary of the U.S. Department of Health and Human Services negotiates the prices with the drug manufacturers. Once the prices increase faster than the Consumer Price Index (CPI), they have to pay a rebate to Medicare.

In Medicare, the IRA limits the enrollees’ overhead expenses and lowers the costs of prescription drugs. This way money for the federal government will also be saved. The Congressional Budget Office estimates that in the next 10 years, there will be a net savings of $56.3 billion. Lastly, there will be a three-year extension of the important tax credits. This means that an average Affordable Care Act participant will save more than $800 per year.

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