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A sweeping federal law adopted in 2022 is reshaping the United States’ approach to healthcare costs, clean energy, and corporate taxation. Enacted in mid-August of that year, it represents a hard-fought compromise that delivers targeted relief for households, accelerates climate action, and seeks fairer revenue collection from highly profitable corporations.

What’s in the law

Lawmakers structured the package around three pillars:

• Lowering out-of-pocket healthcare expenses, especially for prescription drugs
• Investing in cleaner, more secure energy systems
• Ensuring major corporations contribute a baseline level of tax revenue

Independent budget analyses suggest the package could trim the federal deficit by hundreds of billions of dollars over the next decade, reflecting both new revenue and long-term savings.

Prescription drugs and coverage stability

A central healthcare provision empowers the federal program for older adults to negotiate the prices of certain medicines—something long debated in Washington. The negotiation process began in 2023, with the first lower prices set to take effect in 2026. Over ten years, this change is expected to save the government tens of billions of dollars and reduce costs for patients relying on high-priced therapies.

The law also extended enhanced subsidies for those buying coverage on individual marketplaces through 2025. Without this extension, millions would have faced steep premium hikes when temporary assistance expired at the end of 2022. Instead, marketplace enrollment surged to record levels by late 2023, as lower premiums kept coverage within reach for families and self-employed workers.

Clean energy: the largest climate investment in U.S. history

The law dedicates roughly $369 billion to the energy transition, spanning tax credits, grants, and loans. It rewards clean power generation and storage, supports carbon management technologies, and catalyzes domestic manufacturing of wind, solar, batteries, and grid components. The package also funds resilience and efficiency—vital for communities facing heat waves, wildfires, and intensified storms.

For households, incentives make it easier to electrify everyday life: upgrading heat pumps and insulation, installing rooftop solar, and purchasing cleaner vehicles. A key consumer benefit is a potential credit of up to $7,500 for qualifying new electric cars, structured to nudge supply chains toward North American assembly and responsibly sourced battery materials. The market response was swift—electric vehicle sales in 2023 jumped more than 50% from the previous year, crossing three-quarters of a million units.

These investments are designed to cut climate pollution, reduce dependence on volatile fossil fuel markets, and improve public health. Cleaner air near busy roads and power plants, lower energy bills thanks to efficiency, and new jobs in advanced manufacturing and construction are among the anticipated dividends.

Corporate tax changes and better enforcement

To help pay for the law’s programs, policymakers created a 15% minimum tax on firms reporting over $1 billion in annual profits. The goal is to ensure that highly profitable companies contribute a fair share, even when complex tax strategies might otherwise drive their effective rates close to zero. Estimates suggest this provision alone could raise around $220 billion over ten years.

Additional resources for tax enforcement are already producing returns. Early results indicate billions in extra revenue as the agency focuses on complex high-income and corporate cases, improving compliance without increasing audit rates on typical wage earners.

Early signs and broader impact

Several effects are already visible:

• Drug price negotiations are underway, setting the stage for relief in 2026 for patients facing steep pharmacy bills.
• Marketplace premiums remain more affordable for millions, reinforcing record enrollment and reducing uninsured rates.
• Clean energy projects—from utility-scale renewables to community solar and energy storage—are ramping up as developers respond to long-term policy certainty.
• EV adoption continues to climb, supported by consumer incentives and the expansion of domestic battery and component manufacturing.
• Improved tax enforcement is delivering early revenue gains, helping finance climate and healthcare benefits while reducing the deficit.

Why it matters for households and the planet

By coupling consumer savings with industrial policy, the law aims to align household budgets with climate progress. Families can lower energy bills through efficiency upgrades and electrification; communities can benefit from cleaner air as fossil fuel dependence declines; and workers stand to gain from new factories, grid projects, and retrofits. For the climate, sustained investments over the next decade are intended to push emissions downward while enhancing energy security and resilience.

What to watch next

• Implementation timelines: Drug price cuts begin in 2026, while energy incentives roll out in phases to support projects large and small.
• Supply chains: Sourcing and manufacturing requirements for vehicle and battery incentives will keep evolving, shaping which models qualify.
• Grid readiness: Transmission upgrades and smarter infrastructure will be pivotal to unlock more renewables and maintain reliability.
• Community access: Ensuring that low- and moderate-income households, renters, and rural communities can tap incentives will determine how broadly the benefits are shared.

In short, this law marks a rare convergence: easing healthcare burdens, accelerating clean energy, and closing tax loopholes in one package. The coming years will test how effectively these policies translate into lower bills, more resilient infrastructure, and measurable climate gains.