UPDATED August 12, 2022: The landmark legislation will lower health care costs for people across the country, according to Centers for Medicare & Medicaid Services (CMS) Administrator Chiquita Brooks-LaSure. Here’s a look of the health care aspects included in the bill and what was left out.

Article updated 5:45 p.m. EST, Friday, August 12, 2022

Under the budget reconciliation process, the Senate on Sunday passed the Inflation Reduction Act, 51-50, across party lines, with all Democrats in favor and all Republicans opposed. Vice President Kamala Harris provided the tie-breaking vote. Budget reconciliation allowed the bill to pass with a 50-vote majority instead of the 60-vote filibuster threshold. The bill now goes to the House of Representatives, which is expected to vote and pass it on Friday, sending it to President Biden to sign it into law.  

BREAKING NEWS: After more than eight hours of debate on Friday, the House voted 220-207 to adopt the Inflation Reduction Act. No Republicans joined Democrats in supporting the legislation. The House will now send it to Biden, who is expected to sign it into law next week. 

The $740 billion legislation, a slimmed down version of the Build Better Act, would:

  • Allow Medicare for the first time to negotiate the cost of certain prescription drugs
  • Caps the cost of insulin at $35 for those on Medicare
  • Provides a three-year extension of federal tax credits for health insurance premiums on the Affordable Care Act marketplaces
  • Limits the amount of money people with Medicare Part D pay for prescription drugs at $2,000 a year, with an option to break that amount into monthly payments
  • Introduces a new provision to impose penalties on drug companies that increase prices in Medicare above the rate of inflation
  • Makes eligible vaccines free for seniors with Medicare Part D coverage

“I’ve traveled around the country and heard from families and health care navigators that the enhanced tax credits have made a difference in obtaining health coverage and actually getting care,” Brooks-LaSure said in a statement.  “And the question I am asked most often is how CMS can make prescription drugs more affordable. The Inflation Reduction Act achieves both these goals. We look forward to Congress sending this bill to the President’s desk to sign and CMS is ready to implement.”

RELATED: RISE Radio Episode 12: RISE West 2022 panelists on the most pressing policy issues facing health plans this year

However, the Democrats failed in their effort to allow a $35 cap on insulin for the millions of Americans who have private health insurance. The Senate parliamentarian decided that extending the cap to the market didn’t comply with the rules of reconciliation, so Democrats needed 10 Republicans to sign on to get the 60 votes necessary to reinsert it in the bill. The measure failed with only 57 votes.

Funding for the bill will come from new corporate taxes and savings on government spending on prescription drugs. The Joint Economic Committee Democrats said the combined effect of the drug price provisions and extended health insurance subsidies will reduce the federal deficit by $244 billion over 10 years, helping to curb overall inflation.