What’s in it for you? Five cash benefits in the Democrats’ climate and health bill

WASHINGTON — The Democratic spending bill making its way through Congress contains a series of benefits for consumers, including tax credits for clean energy household products and electric vehicles, as well as savings on prescription drugs and health insurance premiums.

The Inflation Reduction Act passed the Senate on a party-line vote Sunday and is expected to get a vote in the House on Friday, before heading to President Joe Biden’s desk.

“Yes, I hope to pass it on Friday,” Speaker Nancy Pelosi told NBC News on Tuesday. “It’s a great bill. It’s historic.”

Republicans, who unanimously oppose the bill, have blasted it as a “reckless taxing and spending spree” that won’t solve inflation and could harm pharmaceutical innovation.

The legislation includes over $400 billion in spending on energy and health care programs, with more than $700 billion in revenues through drug savings and higher taxes on corporations.

Unlike the Covid relief packages in recent years, there are no direct payments or checks in the mail for broad swaths of people. So what’s in it for ordinary Americans? Here’s a rundown.

Medicare out-of-pocket cap, free vaccines

For the first time, Medicare beneficiaries will see their yearly out-of-pocket expenses capped at $2,000 starting in 2025. Today, there is no cap. Medicare seniors would also have the option of spreading out the expenses over monthly payments.

The average Medicare recipient spent $5,460 on out-of-pocket costs such as deductibles and copayments in 2016, according to a study by the nonpartisan Kaiser Family Foundation.

In addition, the bill grants them free recommended vaccines, including for Covid and shingles.

Clean vehicles credit

Want to buy an electric vehicle? The bill offers a credit of up to $7,500 for qualified “clean” vehicles, including popular models from General Motors, Tesla and others.

That credit drops for vehicles that don’t meet all the requirements on electricity power and mineral or battery components, according to details provided to NBC News by the Senate Finance Committee.

It applies to new vehicles that cost up to $55,000 — or $80,000 in the case of SUVs and vans. And you have to earn less than $150,000 in income (or $300,000 for joint filers) to qualify.

There’s a catch: The benefit is cut or eliminated unless the vehicle is sold by a “qualified manufacturer” and for which the final assembly took place in North America, in order to increase domestic production.

For previously owned electric vehicles that are at least two years old and selling at $25,000 or less, there is a credit of up to $4,000 — allowable for individual incomes up to $75,000, according to an analysis by the Bipartisan Policy Center.

Energy efficient home credits

The bill contains a grab-bag of benefits to encourage the use of clean energy items in homes over the next decade.

It increases the credit for installing qualified goods — such as Energy Star products — at non-business properties from 10 percent to 30 percent. That includes “solar electric, solar water heating, fuel cell, and small wind energy, and geothermal heat pumps,” according to the Senate Finance Committee.

The legislation replaces a lifetime cap on credits with a $1,200 annual credit ceiling, offering $600 for energy-efficient windows and $500 for doors. That jumps to $2,000 for biomass stoves and heat pumps. It also enhances the existing credits to cover home energy audits (to $150) and upgrade electrical panels (to $600).

Medicare insulin cap of $35

For Medicare beneficiaries, the legislation imposes a $35 cap on the cost of covered insulin products starting in 2023.

A Health Affairs study last month found 41% of people who use insulin were on Medicare. Overall, 14% of those using insulin said they spend “catastrophic” levels of money on insulin — more than 40% of their remaining income after paying for food and housing.

Democrats also attempted to cap insulin costs on the private market at $35, but Republicans objected and that provision was stricken under the Senate’s strict budget rules needed to pass the bill. Subsequent attempts to add it were unsuccessful.

Affordable Care Act funding

The bill prevents a sharp hike in health insurance premiums on Affordable Care Act plans that were scheduled to hit next year by extending enhanced funding for the ACA passed under the American Rescue Plan for another three years, through the end of 2025. That means the extra aid remains available to Americans with incomes above 400% of the federal poverty level, with premiums capped at 8.5% of family income for the “benchmark” plans.

It means no sticker shock this fall for millions of Americans who were otherwise slated to face premium hikes as a result of the money drying up, a prospect that many Democrats were nervous about heading into the Nov. 8 midterm election.