Two years ago today, the Inflation Reduction Act (IRA) was signed into law

By Isabel Soisson

The Copper Courier

AB: This piece on the IRA cover quite a bit of territory discussing the Inflation Reduction Act. There is still more that was accomplished under the Biden Administration with the American Rescue Plan 2021 Act. Who would have thought an old president suffering from dementia could have accomplished so much? Listening to Biden for a while. It did not appear like he had a teleprompter and he covered a lot of territory, He is leaving the US in far better shape than many presidents. The president Kamala Harris will have a solid foundation to build upon, Hopefully, she resolves the tax issues caused by trump 2017 Tax Cuts and Jobs Act.

This piece from the Copper Courier discusses the Inflation Reduction Act impact on Arizona .

Two years ago today, the Inflation Reduction Act (IRA) was signed into law.

The legislation represented the largest-ever investment in fighting climate change, lowered health care and prescription drug costs, raised taxes on corporations, and boosted funding for the Internal Revenue Service to go after wealthy tax cheats.

The bill was passed with only Democratic votes—including those of Sen. Mark Kelly and Rep. Ruben Gallego—with every Republican in Congress voting against it, despite its potentially transformative impact on the economy and the nation’s clean energy infrastructure.

Here are some highlights of how the Inflation Reduction Act has impacted Arizona:

Lower health care and prescription drug costs

The Inflation Reduction Act extended generous subsidies that helped make Affordable Care Act (ACA) health insurance plans more affordable for working- and middle-class families.

Those subsidies were introduced as part of President Joe Biden’s American Rescue Plan of 2021, and were set to expire at the end of 2022, but the IRA extended them through the end of 2025.

Roughly 41,000 Arizonans were set to lose their individual coverage and become uninsured had those subsidies expired at the end of 2022, but thanks to the Inflation Reduction Act, those people got to keep their insurance.

The IRA also reformed Medicare to lower drug costs for many of the over 1.1 million Arizona seniors with Medicare Part D coverage, which covers prescription drugs. 

For example, beginning last year, all vaccines covered under Medicare Part D are free, and the bill implemented a $35 monthly cap on insulin for Medicare recipients.

As a result, over 28,000 Arizona seniors on Medicare who use insulin are now charged no more than $35 per month for an insulin prescription. 

The IRA will also implement a $2,000 cap on Medicare recipients’ annual out-of-pocket prescription drug costs, beginning in 2025. In Arizona, an estimated 389,000 seniors are expected to save $380 a year each due to this provision, according to an analysis by the US Department of Health and Human Services.

Additionally, the law authorized Medicare to negotiate prices for expensive drugs with pharmaceutical companies for the first time. On Thursday, the Biden-Harris administration announced the new, lower prices of 10 expensive and widely-used drugs that were selected last year for the first round of negotiations.

The negotiations — which used the power of Medicare to lower drug costs for seniors — are expected to save taxpayers about $6 billion in 2026, when they go into effect. The new prices will be anywhere from 38% to 79% lower than the drugs’ list prices last year, saving seniors on Medicare an estimated $1.5 billion in out-of-pocket costs in 2026 alone. 

Fighting climate change and saving families money on energy

Arguably the most critical element of the IRA is its provisions to reduce emissions that cause climate change and drive extreme weather events. The law aims to do this by establishing a mix of tax credits for companies and rebates for consumers in order to make the manufacturing and consumption of clean energy technologies and products cheaper. 

In other words: by making clean energy—like solar, wind, and hydropower—cheaper to produce and use, the IRA seeks to hasten the transition away from fossil fuels that are one of the biggest sources of emissions.

For example, under the law, manufacturers get subsidies for building electric vehicles (EVs) and renewable energy products, and utilities get credits for choosing solar and wind energy over fossil fuel plants.

As of 2024, the Inflation Reduction Act has spurred $11.8 billion in new clean energy investments in Arizona and created 18,130 new clean energy jobs statewide, according to Climate Power.

In Arizona, several manufacturers have already taken advantage of the IRA’s incentives.

LG Energy Solution, a South Korean battery manufacturer, announced last year that it would quadruple its planned investment in a new factory near Phoenix to meet a growing demand from automakers to ramp up production of electric vehicles. Construction of the facility is expected to be finished in the next two years, and hiring will begin at the end of this year.

Kore Power, Inc., a battery cell developer, is also in the process of building a lithium-ion battery factory in Buckeye. Last year, the US Department of Energy gave the company a federal loan of $850 million to build the facility. The factory will make high-density cells, which are designed for use in transportation and stationary energy storage once production begins. Construction of the facility is set to begin this year, and once operational, the site will create more than 1,250 jobs, the majority of which will be available to workers with a GED.

The IRA also provided $80 billion in financial rebates for millions of households to adopt those clean energy products, such as electric vehicles, solar panels, and more efficient heat pumps.

More than three million American households took advantage of the IRA’s subsidies for homeowners last year, which led to a combined savings of $8 billion, according to data from the Treasury Department. This includes 88,720 Arizona households that saved over $285 million, or $3,213 per household on average.