Priorities include spending on climate, lower drug prices, tax enforcement

Richmond, Va.—In response to news that the Inflation Reduction Act may pass the Senate, Virginia Organizing issued the following statement:

Members of Virginia Organizing are glad to see the news that Congress may finally be able to pass a budget reconciliation bill that will increase funding for critical issues that affect all of us. The Inflation Reduction Act, according to Senators Mark Warner and Tim Kaine, who support the bill, will ensure that Virginians who currently struggle with the cost of health care will receive assistance for prescription medicine and their Affordable Care Act premiums. It will also reduce carbon emissions, which will protect communities from worsening floods and heat waves. The bill raises revenue for these programs by increasing tax enforcement on the most wealthy Americans and corporations who have not been paying their fair share.

The bill would raise revenue from:

• Aligning with the 15% global minimum corporate tax rate – $313 billion
• Prescription drug price reform, including Medicare negotiation of drug prices – $288 billion
• Increased tax enforcement – $124 billion
• Eliminating the carried interest loophole – $14 billion

It would spend this revenue on:

• Continuing for three more years the expansion of Affordable Care Act subsidies originally expanded under the American Rescue Plan Act of 2021 – $64 billion
• “Energy Security and Climate Change” – $369 billion
• Deficit reduction – $306 billion

“After more than a decade of promises to lower drug prices through Medicare negotiations,” said Ladelle McWhorter, Virginia Organizing’s chairperson, “Congress is finally about to pass reforms that will make medicine more affordable for millions of patients and save American taxpayers hundreds of billions by stopping drug corporations from price-gouging. We’re really happy to see this accomplished as Medicare and Medicaid turn 57 years old on July 30. We celebrate the anniversary of Medicaid and Medicare every year because the program has done so much for American health care, and this improvement will make Medicare even better.”

The prescription drug reform part of the bill would:

• Create a “Drug Price Negotiation Program” (DPNP) that would require the Secretary of Health and Human Services (HHS) to negotiate lower prices for 10 of the most expensive drugs in Part D starting in 2023. Negotiated prices would go into effect in 2026. The number of drugs would increase to 20 by 2029.
• Create the first-ever out of pocket cost cap for Medicare beneficiaries in Part D. Although the average senior in Medicare has a median income of $26,000, there is no limit to the amount older adults pay out of pocket for their prescriptions forcing millions of seniors to ration or forgo medicine or to choose between prescriptions and other necessities. The new Senate plan would create a $2,000 out-of-pocket cap for Part D beneficiaries and would make all vaccines free.
• Expand the number of low-income Part D beneficiaries who are eligible for assistance in paying for premiums, deductibles, and other costs from those making 135 percent to 150 percent of the federal poverty line.
• Create a penalty for drug companies that raise prices on existing drugs more than the rate of inflation by making them pay rebates for the difference. Many drug companies increased prices a great deal this year. One medication for autoimmune disease went up 73.4 percent. By requiring the rebate rule to apply to both private insurance and Medicare, employers and workers would also save on the cost of employer-sponsored health insurance.

This legislation saves taxpayers and patients $288 billion over the next decade. That savings will be reinvested to make Affordable Care Act coverage more affordable for millions of Americans facing higher premiums or loss of coverage.

McWhorter added, “We hoped this reconciliation bill would address the Medicaid coverage gaps in 12 states that have not expanded Medicaid, but it does not. More than 400,000 Virginians have benefitted from the Commonwealth’s expansion, and we want to see all Americans gain access to it. However, Congress still has the opportunity to give this quality, affordable coverage to the millions of Americans who desperately need it, no matter where they live, what they look like, or what kind of job they have. That would give everyone more to celebrate this year.”

For more information or to interview a spokesperson for Virginia Organizing, please contact Rosemary Gould at 434-962-7261 or rosemary@virginia-organizing.org.