8 August 2022 — 1741 mdt
Senate passes better than nothing bill with
modest health care and global warming benefits
By James Conner
Updated and rewritten. Yesterday, the U.S. Senate passed, on a 51–50 party line vote, the Inflation Reduction Act, which now goes to the U.S. House where it will be approved later this week. Montana’s senior senator, Democrat Jon Tester voted for the bill. Montana’s junior senator, Republican Steve Daines, voted against it.
According to the Washington Post, the bill “…caps seniors’ out-of-pockets costs for drugs at $2,000 annually and imposes a $35 limit on how much they’d pay per month for insulin.” An attempt to extend the insulin cap to private health insurance plans was blocked by Republicans. The bill also allows the federal government to negotiate lower drug prices.
But, according to The Lever, not much negotiating will take place, and it won’t take place anytime soon.
Democrats’ legislation does still allow Medicare to negotiate drug prices for the first time — but only on 10 drugs by 2026, and eventually 20 drugs per year. Removing the inflation cap will substantially limit protections for patients on private health insurance plans. Medicare patients will benefit from the $35 cap on out-of-pocket insulin costs, but patients on private insurance plans will not.
Taken together, Democrats’ signature drug pricing measure is now a shell of the proposal that lawmakers debated for much of last year, and far weaker than the compromise deal negotiated by the party’s drug industry allies.
With Medicare Part D plans, most seniors on generic drugs are covered with small co-pays; my co-pays are $1.35 for most prescriptions. But low income seniors needing expensive medications still will be squeezed, although not as much as before. Some will end up with the choice of getting behind in their utility bills or skimping on life saving medications. That should not be the American way — but it is, and many improvements to this legislation will be required before the United States fairly prices prescription medications.
Big Pharma’s hideously expensive lobbying against price negotiations whittled the bill down to almost nothing, but the drug boys did not succeed in keeping the price negotiating foot out of the door. Price negotiating can be revisited once Democrats get governing majorities in both houses of Congress (that may take a few more elections).
Global warming slowed, but not cooled
In addition to creating and/or extending tax credits to encourage the transition to electric transportation, the bill contains carbon capture and nuclear power incentives of dubious merit:
The oil and gas industry is also interested in other provisions, especially the generous tax provision for projects that would capture carbon — and store or use it. The tax credit would provide $85 a ton to bury the carbon dioxide underground, $60 a ton for utilization or injection for enhanced oil recovery, and $180 a ton for capturing directly from the air.
The act would also bestow $30 billion to the nuclear industry by providing tax credits to the owners of existing reactors — not to incentivize them to do something, but to just stop them from closing down, as many have threatened to do. The United States has 92 reactors, but seven have closed in the past decade, according to the Energy Information Administration.
It’s better not to produce carbon than to produce it and then spend money and energy capturing it to prevent its becoming a greenhouse gas. The money for keeping nuclear reactors online is a bribe. These provisions are Joe Manchin’s price for agreeing to the legislation.
Kyrsten’s last minute extortion
Sen.Kyrsten Sinema’s (D-Arizona) price for supporting the bill was stripping it of provisions to increase slightly taxes on private equity firms and on certain manufacturing firms. Majority leader Schumer offset the revenue reduction, but she flaunted her brand by leaving her mark on the bill. With Sinema, politics always trumps policy. Several Democratic senators running for re-election joined her.
The bill is sausage. It smells like sausage, tastes like sausage. But even gamy sausage provides some nourishment. That’s why Sen. Bernie Sanders (D-Vermont) voted for it. Given how divided our nation is, the bill’s approval by the Senate is progress; just not a lot of progress; just not as much progress as we need.