Senate Democrats pass major healthcare deal that includes drug price reforms


The Senate on Sunday passed a bill spending hundreds of billions of dollars on climate and healthcare programs, including provisions that give Medicare drug price negotiating power and extends enhanced Affordable Care Act subsidies for three years. 

Senate Democrats passed the sweeping tax, climate and health care reconciliation package, called the Inflation Reduction Act, after an all-night session, with Vice President Kamala Harris casting the tie-breaking vote.

The package will still need to clear the narrowly Democratic House in a vote scheduled for Friday. 

Democrats have said earlier versions would raise roughly $740 billion in revenue and spend roughly $430 billion of that over a decade, the Wall Street Journal reported. It sets aside roughly $300 billion toward reducing the deficit.

Going into the weekend, the chamber planned for a noon Saturday vote on the spending package that includes other drug price reforms such as a cap on out-of-pocket drug costs. Dems scheduled the weekend vote after securing support from holdout Sen. Kyrsten Sinema, D-Ariz, for the package.

If finalized, the legislation would grant Medicare the power to negotiate for lower prices on 10 drugs in Part B in 2026. The number of drugs would eventually grow the next year to 15 and in 2029 every year after 20. It would also include a monthly cap on cost-sharing payments for Medicare Advantage and Part D plans in 2025.

The final legislation also includes a $35 cap on insulin but only for Medicare patients. Republicans successfully stripped a provision that would have extended the cap to private plans as well.

Democrats relied on a parliamentary procedure called reconciliation that enables budget bills to pass the Senate via a simple majority and bypass the 60 votes needed to break a filibuster. 

The Senate parliamentarian reviews the legislation to ensure that it conforms with reconciliation rules and can scrap any provisions it believes doesn’t fit that criterion. 

In an eleventh-hour change to the bill, Elizabeth MacDonough, the Senate parliamentarian, said lawmakers had to remove language that would have slapped penalties on drug makers that boost their prices beyond inflation in the private insurance market, MarketWatch reported.

The legislation would also extend enhanced ACA subsidies for another three years. The boosted subsidies helped fuel a record 14.5 million signups for the ACA exchanges this year but will go away starting in 2023.

The legislation offers tax incentives for reducing carbon emissions, allots roughly $80 billion to the Internal Revenue Service and raises taxes on large, profitable companies.

Staff writer Robert King originally reported this story.

Editor's note: Updated Monday, Aug. 8, at 6:30 a.m. ET.