Article Summary –
Sixteen House Republicans, led by Rep. Scott Perry, have filed a bill to repeal the Inflation Reduction Act of 2022, which was passed by Democratic majorities and includes provisions for energy investments, prescription drug cost caps, and Medicare price negotiations. The law’s repeal could lead to higher costs for millions of Americans, despite broad public support for its measures, such as the $2,000 out-of-pocket cap on prescription drugs and $35 insulin cost cap. With recent political shifts giving Republicans a Senate majority and Donald Trump’s anticipated presidency, the possibility of repealing the law has increased, though challenges remain in assessing its economic impact.
Pennsylvania Republican U.S. Rep. Scott Perry, alongside 15 other House Republicans, has introduced a bill aiming to repeal the Inflation Reduction Act of 2022. This legislation, signed into law by President Joe Biden, focuses on health care and clean energy infrastructure. Repealing the act could lead to increased costs for millions of American consumers.
The Inflation Reduction Act, passed by Democrats in Congress without Republican support, allocated $369 billion for energy and climate infrastructure. It also capped out-of-pocket drug and insulin costs for seniors, allowed Medicare to negotiate drug prices, and funded IRS modernization to target wealthy tax evasion.
Starting January 1, a provision from the act limited Medicare Part D subscriber copayments to $2,000 annually. This change is projected to save nearly 19 million Americans an average of $400 annually by 2025, with the highest drug spenders saving about $2,500, according to a Department of Health and Human Services model.
The first 10 drug price reductions under the act will be effective in 2026, saving Medicare Part D users around $1.5 billion yearly in out-of-pocket costs and $6 billion for the Medicare program, as per the Centers for Medicare and Medicaid Services.
A September 2024 KFF Health poll indicated that 85% of registered voters support Medicare drug price negotiations, including 77% of Republicans. Over two-thirds favor extending the $2,000 out-of-pocket cap and $35-a-month insulin cap to other insurance holders.
Despite broad support, Republicans in Congress, backed by Big Pharma donors, seek the law’s repeal. With Democrats controlling the Senate and President Biden in office through 2024, prior repeal attempts went nowhere.
Now, with Republicans expected to gain a Senate majority and former President Donald Trump poised for a White House return, a full or partial repeal is more likely. A Brookings Institution analysis on January 6 observed potential economic impacts, though it’s unclear if the Congressional Budget Office will factor this in.
Despite opposing the Inflation Reduction Act, Perry praised a Dauphin County clean energy project enabled by the act’s tax credits, as noted by Climate Power in a September 2024 report.
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