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How could the Inflation Reduction Act improve the lives of millions of US seniors?

Several parts of the new legislation are specifically aimed at seniors, particularly in terms of healthcare.

Update:
Several parts of the new legislation are specifically aimed at seniors, particularly in terms of healthcare.
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The Inflation Reduction Act will soon be crossing President Biden’s desk. It is the reworked Build Back Better Bill that has been cut much smaller to appease the whole Democrat caucus which passed in the Senate on Sunday. Plenty of the bill is aimed at dealing with the climate crisis, though there are also sections dealing with rising costs for seniors, especially in terms of drug pricing.

“This is going to be game-changing,” Rena Conti, an associate professor at Boston University’s Questrom School of Business who studies drug pricing, said of the bill.

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What aspects of the bill are targeted at seniors?

The act allows Medicare to negotiate for the price of prescription drugs starting in 2023. At present, the country’s largest healthcare provider cannot negotiate the price of drugs it purchases, leaving prices at the whim of drug providers. Much like the National Health Service in the UK, Medicare will now be able to drive down the price of drugs it purchases, potentially increasing options for senior medication at cheaper prices.

There is greater protection from sky-high drug prices. 400,000 more Medicare beneficiaries are expected to be eligible for the Low Income Subsidy. There are also new limits on out of pocket expenses for drugs, which will be limited at $2,000 a year from 2025. In 2019, 1.5 million seniors spent more than $2,000 on prescriptions, according to the Kaiser Family Foundation. Medicare enrollees are further protected in terms of insulin. The price of insulin will be capped at $35 per month.

Outside of expanded Medicare support, tax breaks included in the legislation could lead to around $1,800 of savings by the average household. While savings for seniors are unlikely to be that high, tax credits and discounts of household insulation and electric cars will be welcomed by seniors looking to make an environmental impact.

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