In 2022, I voted in favor of the Inflation Reduction Act (IRA) which President Biden later signed into law. We got a lot done that summer – expanding health care for veterans, bringing chip manufacturing back to the U.S., rebuilding our aging infrastructure, and more – so it’s easy to lose track of all the incredibly valuable provisions that were included in these transformative bills. Today, I’m breaking down the Inflation Reduction Act (IRA), and I hope you’ll look into the different cost savings available to you and your family because of this important new law.
The IRA Reduces the Cost of Prescription Drugs
Recent reductions in the cost of prescription drugs from the IRA are already helping thousands of Pennsylvanians. In fact, The Wall Street Journal recently published a piece: Medicare Patients on Pricey Drugs Are Saving Big This Year – and they’re right! I was disappointed that not a single Republican voted for the Inflation Reduction Act (IRA), which included these cost-saving, life-saving provisions, but I’m pleased that people in every zip code are seeing their prescription drug bills go down.
Here’s an implementation timeline of some of the most impactful provisions of the IRA:
2023
Drug companies required to pay rebates to Medicare if prices rise faster than inflation
Insulin price is capped at $35/month for Medicare beneficiaries
Cost sharing of vaccines for Medicare beneficiaries is eliminated
2024
Cost of drugs such as Pomalyst, Revlimid, Imbruvica, Jafaki, and Ibrance are cut by over 50% for Medicare Part D enrollees
The low-income subsidy program (LIS or “Extra Help”) under Medicare Part D is expanded to 150% of the federal poverty level
HHS identifies the first 10 drugs for Medicare drug price negotiation, to help keep costs low
2025
2026
Read a comprehensive timeline of the Inflation Reduction Act (IRA) health care provisions here!
The IRA & Appliances and Utilities
Are you spending a lot of money to heat and cool your home? Upgrade to an efficient electric heat pump and you could be eligible for up to $2,000 in tax credits! If you’re unsure what the best home improvement is for your family, you can claim a tax credit of up to $150 for a home energy audit conducted by an inspector — all thanks to the IRA!
How do I apply for appliances and utilities tax credits?
When you file your taxes, you must complete the tax form 5695, which is specifically for residential energy credits. To learn more about these credits and check what you're eligible for, visit this IRS page or this page on specific appliance upgrades. For information on how to fill out this specific tax form, click here.
The IRA & Insulation
By adding insulation or installing efficient windows and doors, Americans are able to get up to $1,200 in tax credits each year! Not only will this bring down heating costs in the winter, but it will also put more money in your pocket.
How do I apply for insulation tax credits?
This can also be done on tax form 5695! To learn more about these credits and check what you're eligible for, visit this IRS page. For information on how to fill out this specific tax form, click here.
The IRA & Solar Power
I recently visited Reformation Lutheran Church in Reiffton to see their newly installed solar panels. Not only can nonprofits and businesses apply for these solar panels, but individuals can as well!
