FOR IMMEDIATE RELEASE
AUGUST 30, 2022
What the Inflation Reduction Act Means for South Dakota
President Biden and Democrats’ Inflation Reduction Act means lower costs on everything from prescription drugs and health care premiums to home energy costs
With the passage of the Inflation Reduction Act, President Biden and Democrats are taking on special interests to lower costs for South Dakotans. The new law will mean cleaner, more affordable home energy, lower cost prescription drugs, hundreds of dollars of savings on health care premiums, more good-paying jobs, and a whole lot more for South Dakotans.
See below some specific ways the Inflation Reduction Act will help save people money and grow the economy in South Dakota:
CUTTING PRESCRIPTION DRUG COSTS:
- The Inflation Reduction Act will protect tens of thousands of seniors in South Dakota from catastrophic drug costs by capping Medicare beneficiary out-of-pocket costs at $2,000. Each year, this will benefit about 6,100 Medicare beneficiaries in South Dakota who would otherwise have out-of-pocket costs above the cap, and, for the first time, all 127,000 South Dakotans with Medicare Part D will have the peace of mind of knowing their pharmacy costs are capped.
- The law allows Medicare to negotiate some high-cost prescription drug prices, which will bring down the out-of-pocket costs of these drugs for Medicare beneficiaries in South Dakota.
- The Inflation Reduction Act will require companies to pay Medicare a rebate if they increase drug prices faster than inflation, which will further reduce out-of-pocket costs for South Dakota’s Medicare beneficiaries.
- It will cap Medicare beneficiaries insulin copays at $35 per month.
- The Inflation Reduction Act expands eligibility for full Part D Low-Income Subsidies – known as Extra Help – to beneficiaries with low incomes. About 900 South Dakotan Medicare beneficiaries received partial Extra Help in 2020 and could be helped by the expansion of income eligibility for full Extra Help.
LOCKING IN LOWER HEALTH INSURANCE PREMIUMS AND EXPANDING COVERAGE:
- About 8,000 more South Dakotans will have health insurance next year compared to without the Inflation Reduction Act.
- About 41,000 South Dakotans with Affordable Care Act (ACA) Marketplace coverage are saving an average of about $1,040 annually from the American Rescue Plan subsidies that the Inflation Reduction Act continues. This particularly helps small business owners and self-employed people in South Dakota, who make up 29% percent of ACA marketplace enrollment among working-age South Dakotans.
LOWER ENERGY COSTS:
- The law includes rebates covering 50-100% of the cost of installing new electric appliances, including super-efficient heat pumps, water heaters, clothes dryers, stoves, and ovens. In South Dakota, hundreds of thousands of low- and moderate-income households are eligible for rebates.
- Grants created by the Inflation Reduction Act will help state and local governments adopt the latest building energy codes, which would save the average new homeowner in South Dakota 25.2% on their utility bills—$727 annually.
- In 2021, there were already 11,860 South Dakotan workers employed in clean energy jobs. The Inflation Reduction Act will expand these opportunities, bringing an estimated $7.3 billion of investment in large-scale clean power generation and storage to South Dakota between now and 2030.
- The law provides a historic set of tax credits that will create jobs across solar, wind, storage, and other clean energy industries. These credits include bonuses for businesses that pay a prevailing wage so that South Dakotan workers earn a good paycheck as we build the clean energy future in America.
- Manufacturers employ 43,800 workers in South Dakota, and the Inflation Reduction Act will help us make the technologies of the future at home—supporting local economies and strengthening supply chains.
- South Dakota is home to 89,942 small businesses, representing 99% of all businesses in the state, and the Inflation Reduction Act will help them save money.
- Commercial building owners can receive a tax credit up to $5 per square foot to support energy efficiency improvements that deliver lower utility bills. Other programs that will benefit small businesses include tax credits covering 30% of the costs of installing low-cost solar power and of purchasing clean trucks and vans for commercial fleets.
- The Inflation Reduction Act supports climate-smart agriculture practices, which will help South Dakota’s 29,400 farms lead on climate solutions and reward their stewardship.
- Electric cooperatives, which serve about 165,000 homes, businesses, and other customers in South Dakota, will for the first time be eligible for direct-pay clean energy tax credits. And this legislation dedicates investments for rural electric cooperatives to boost resiliency, reliability, and affordability, including through clean energy and energy efficiency upgrades.