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What's in it for you? Five benefits for average Americans in the Democrats' climate and health bill

The spending bill, which could get final passage in Congress by the end of the week, includes tax credits for many electric cars and would cap out-of-pocket costs for seniors on Medicare.
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WASHINGTON — The Democratic spending bill making its way through Congress includes a series of benefits for consumers, including tax credits for clean energy household products and electric vehicles, as well as savings on prescription drugs and health insurance premiums.

The Inflation Reduction Act passed the Senate on a party-line vote Sunday and is expected to get a vote in the House on Friday, before it heads to President Joe Biden’s desk.

“Yes, I hope to pass it on Friday,” Speaker Nancy Pelosi, D-Calif., told NBC News on Tuesday. “It’s a great bill. It’s historic.”

Republicans, who unanimously oppose the bill, have blasted it as a “reckless taxing and spending spree” that wouldn't solve inflation and could harm pharmaceutical innovation.

The legislation includes over $400 billion in spending on energy and health care programs, with more than $700 billion in revenue through drug savings and higher taxes on corporations.

Unlike with the Covid relief packages in recent years, there would be no direct payments or checks in the mail for broad swaths of people. So what’s in it for ordinary Americans? Here’s a rundown.

Medicare out-of-pocket cap, free vaccines

For the first time, Medicare beneficiaries’ yearly out-of-pocket drug expenses would be capped at $2,000 starting in 2025. Today, there is no cap. Medicare seniors would also have the option of spreading out the expenses over monthly payments.

The average Medicare recipient spent $5,460 on out-of-pocket costs, such as deductibles and copayments, in 2016, according to a study by the nonpartisan Kaiser Family Foundation.

In addition, the bill would grant them free recommended vaccines, including vaccines for Covid and shingles.

Clean vehicles credit

Want to buy an electric vehicle? The bill would offer a credit of up to $7,500 for qualified “clean” vehicles, including popular models from General Motors, Tesla and others.

The credit would drop for vehicles that don't meet all the requirements for electricity power and mineral or battery components, according to details provided to NBC News by the Senate Finance Committee.

It would apply to new vehicles that cost up to $55,000 — or $80,000 in the case of SUVs and vans. And you would have to earn less than $150,000 in income (or $300,000 for joint filers) to qualify.

There’s a catch: The benefit would be cut or eliminated unless a vehicle is sold by a “qualified manufacturer” and the final assembly took place in North America to boost domestic production.

For previously owned electric vehicles that are at least two years old and selling at $25,000 or less, there would be a credit of up to $4,000 — allowable for individual incomes up to $75,000 — according to an analysis by the Bipartisan Policy Center.

Energy efficient home credits

The bill includes a grab-bag of benefits to encourage the use of clean energy items in homes over the next decade.

It would boost the credit for installing qualified goods — such as Energy Star products — at nonbusiness properties from 10% to 30%. That includes “solar electric, solar water heating, fuel cell, and small wind energy, and geothermal heat pumps,” according to the Senate Finance Committee.

The legislation would replace a lifetime cap on credits with a $1,200 annual credit ceiling, offering $600 for energy-efficient windows and $500 for doors. That would jump to $2,000 for biomass stoves and heat pumps. It would also enhance the existing credits to cover home energy audits (to $150) and upgrade electrical panels (to $600).

Medicare monthly insulin cap of $35

For Medicare beneficiaries, the legislation would impose a $35 monthly cap on the cost of covered insulin products starting in 2023.

A Health Affairs study last month found that 41% of people who use insulin were on Medicare. Overall, 14% of those using insulin said they spend “catastrophic” levels of money on insulin — more than 40% of their remaining income after paying for food and housing.

Democrats also tried to cap insulin costs on the private market at $35, but Republicans objected, and the provision was stricken under the Senate's strict budget rules to pass the bill. Subsequent attempts to add it were unsuccessful.

Affordable Care Act funding

The bill would prevent a sharp hike in health insurance premiums for Affordable Care Act plans that were scheduled to hit next year by extending enhanced funding for the ACA that was passed under the American Rescue Plan for three more years, through the end of 2025. That means the extra aid would remain available to Americans with incomes above 400% of the federal poverty level, with premiums capped at 8.5% of family income for the "benchmark" plans.

It would mean no sticker shock this fall for millions of people who were otherwise scheduled to face premium hikes as a result of the money’s drying up, a prospect that many Democrats were nervous about heading into the Nov. 8 midterm election.