These benefits will save certain Americans thousands of dollars every year.
On Tuesday, President Biden signed the Inflation Reduction Act into law, signifying a “major” legislative victory for both his administration and Democrats in Congress, overall — potentially the biggest victory for the party since President Biden took office.
To a celebratory crowd at the White House, Biden hailed the bill as the United States’ “biggest step forward on climate ever.” Specifically, the bill will invest $370 billion towards climate change initiatives — but this bill doesn’t just address climate change. It also marks several major legislative victories in the fields of health care and taxes, too. And now that the bill has been signed into law, it’s worth clarifying the cash benefits you will soon be able to gain from this bill yourself.
For the hyper-curious and the policy wonks, the full 755-page bill is available here to read in full. You can also read a more condensed summary of everything included in the bill — but for those who want the breakdown of cash benefits specifically, we’ve got you covered.
Here’s everything you need to know about the new savings you can definitely expect, from a new (and very much improved) out-of-pocket annual cap for Medicare bills, to a pretty hefty discount on your next Tesla.
Your medicare bill could go down — in some cases, by as much as half
If you’re one of the approximately 63 million Americans who are currently a beneficiary of Medicare, this bill is good news for a number of reasons. First, your yearly out-of-pocket drug expenses will be capped at $2,000 starting in 2025. Seeing as how most Medicare recipients spend double that, on average, this new cap means big savings for millions across across the country.
In addition to the new cap, you’ll also get access to free recommended vaccines — and yes, that would include any future Covid vaccines and boosters. Since it’s more than likely that vaccines like the Covid vaccine will become another annual event, like your flu shot, this Medicare coverage should give you peace of mind.
Lastly, a big win for insulin users across the country: A monthly $35 cap on insulin products will begin in 2023, for all beneficiaries of Medicare. According to recent studies, one in three Medicare beneficiaries have diabetes, and one in five face “catastrophic” spending on their insulin products — so this new insulin cap is definitely one of the biggest wins that will immediately impact lives on a personal level, once the bill kicks into action.
A clean vehicles credit could save you thousands on a new electric car
In the market for a new car in the near future? It’s time to consider a clean energy vehicle — and not just because you want to reduce your carbon footprint (though that’s important, too!). The Inflation Reduction Act includes a provision to incentivize electric vehicle purchases by offering customers a credit of up to $7,500 for purchasing a “clean” vehicle.
This credit will apply for a number of well-known clean energy brands, including Tesla. If you want to take advantage of the full credit, then you’ll want to look at new sedans which cost up to $55,000, or new SUVs and vans that cost up to $88,000. Keep in mind that this credit is only available for those who earn $150,000 or less, or who file jointly and earn $300,000 or less with their partner.
If you don’t want to spring for a new car, you can apply a credit of $4,000 to a previously owned electric vehicle that’s at least two years old, and that costs $25,000 or less. In total, that basically means you’re being offered a 13% discount on a new clean vehicle, and a 16% discount on a used vehicle.
The tax credit for installing clean energy items in your home would triple
The Inflation Reduction Act doesn’t just offer credits for clean energy vehicles. It also offers additional savings in the form of credits that encourage you to install clean energy products in your house.
To be fair, there have already been a number of credits that incentivize Americans to install products like solar panels in residential homes. But now, those credits are exponentially higher. For example, the credit for installing “qualified goods” from ENERGY STAR just increased from 10% to 30%. You can also receive up to $600 for credits towards energy-efficient windows, $500 for energy-efficient doors, and up to $2,000 for heat pumps and biomass stoves.
When you put all of these credits together, that amounts to thousands of dollars in savings — and those savings are helping you transition your home in support of a cleaner, greener, more sustainable future, to boot.
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