River Bend Times

The Congressional Budget Office (CBO) has released its fiscal analysis of the Biden-Harris administration's Medicare Part D Premium Stabilization Demonstration Program. The report estimates that the program could cost taxpayers over $21 billion in three years if it proceeds as planned. This initiative, launched by the Centers for Medicare & Medicaid Services (CMS), aims to reduce seniors' premiums, which have increased due to previous policy changes.

The CBO conducted this analysis at the request of several Republican lawmakers: Senate Budget Committee Ranking Member Chuck Grassley, House Budget Committee Chairman Jodey Arrington, Senate Finance Committee Ranking Member Mike Crapo, House Energy and Commerce Committee Chair Cathy McMorris Rodgers, and House Ways and Means Committee Chairman Jason Smith.

Grassley commented on the findings, stating, "When Democrats unilaterally enacted major changes to Medicare two years ago, they set seniors up for new expenses and fewer options. This nonpartisan CBO analysis confirms CMS’s cost-shifting plan is a dishonest election year gimmick to cover up those consequences."

Arrington also criticized the administration's actions: "As predicted, the Biden-Harris Inflation Reduction Act not only quelled investment for new cures but caused Medicare prescription drug plan premiums to skyrocket." He added that the CBO confirmed that this move would cost taxpayers $7 billion next year alone and $21 billion over three years.

The CBO noted an expected increase in federal Medicare Part D spending by $10-$20 billion in 2025 due to the Inflation Reduction Act. Additionally, temporary subsidies from the demonstration will raise federal spending by another $5 billion and increase net interest spending by $2 billion.

The demonstration program has led to higher bids from plans due to increased expected benefit payments. These higher bids result in increased premiums for beneficiaries and greater federal subsidies to Part D plans. The taxpayer-funded payments cover costs that enrollees would otherwise bear.

Congressional Democrats significantly redesigned the Medicare Part D prescription drug benefit through the Inflation Reduction Act at an estimated cost of nearly $30 billion over ten years. In response, CMS announced its Premium Stabilization Demonstration to lower seniors' Part D premiums artificially by sending federal funds to large health insurance companies.