Now that the approximately $700-billion Inflation Reduction Act is set to become law, here’s a look at how the bill’s provisions could impact Californians.
By Jessica Roy and Jon Healey | Los Angeles Times
The Inflation Reduction Act is headed to President Joe Biden’s desk.
The House approved the bill, a pared-back version of the original Build Back Better legislation, Friday afternoon, with all 220 Democrats voting for it and 207 Republicans voting against it.
Now that the approximately $700-billion package is set to become law, what will it mean for you? Here’s a look at how the bill’s provisions could impact Californians.
California stands to gain the most from several of the bill’s health care provisions because it has the largest number of potential beneficiaries.
For starters, the bill would continue for three years the extra premium subsidies for Affordable Care Act insurance policies that last year’s American Rescue Plan inaugurated. Those subsidies — which amounted to $1.7 billion a year for California alone — dramatically lowered premiums for more than 1 million Californians, including middle-income consumers who had not been eligible for aid previously. Under the act, no one shopping for an Obamacare plan would have to pay more than 8.5% of their income in premiums.
Covered California, the state’s health insurance marketplace, estimated that 220,000 Californians would no longer have been able to afford insurance if the extra subsidies were discontinued. Rates for many lower-income Californians would have doubled, with premiums going up 71% on average for those earning less than 400% of the poverty line, Covered California estimated.
Now, with the aid extended and the state contributing its own subsidy dollars, many Californians could face even lower barriers to obtaining health care. Anthony Wright, executive director of the advocacy group Health Access California, said Covered California could conceivably offer low- and moderate-income consumers a comprehensive, mid-tier policy with no deductible, potentially saving them hundreds to thousands of dollars.
“So we go from the worst of times (the doubling of premiums) to the best of times (capped premiums, and reduced cost-sharing, including in many cases deductibles eliminated). That adds real affordability for California consumers,” Wright said in an email.
California also has more Medicare beneficiaries — 6.6 million in July — than any other state, so the changes in that program will have the most effect in this state. Those changes will help lower seniors’ drug costs, limit increases in Medicare Part D premiums and provide more help to lower-income Americans.
Specifically, the act will benefit Medicare enrollees by:
Capping the price of insulin at $35 a month. Insulin prices have skyrocketed, rising more than four times faster than the pace of inflation from 2000 to 2018 before flattening during the pandemic. Almost half of U.S. states impose a cap of some kind already, but California, with the country’s largest population of people with diabetes (about 3.2 million), does not.
Putting a $2,000 annual limit on out-of-pocket costs for prescription drugs for enrollees in Medicare Part D, starting in 2025. According to the Kaiser Family Foundation, almost 115,000 Californians in Medicare Part D spent more than $2,000 out of pocket on drugs in 2020.
Providing vaccines at no cost.
