Democrats Are Gaming Medicare Costs This Election Year By Joel White

Democrats Are Gaming Medicare Costs This Election Year By Joel White


In the theater of American politics, few performances are as masterful as the Democratic Party's current sleight of hand with Medicare costs. As we approach the election, listen closely to the well-rehearsed lines: President Biden, the valiant warrior, battling "Big Pharma" to lower costs for the common man. Vice President Harris, echoing this heroic narrative on the campaign trail.


It's a captivating story, but one that conveniently obscures an inconvenient truth.


On July 29th, the Centers for Medicare & Medicaid Services (CMS) unveiled a startling revelation: Medicare Part D "bid" rates -- essentially, the monthly cost of providing coverage to the average senior -- were poised to leap from $64.28 in 2024 to a staggering $179.45 in 2025. That’s a 180 percent increase in one year. As bid rates surge, seniors' premiums inevitably follow suit. The timing of this revelation, just months before a presidential election, was a political catastrophe.


The culprit? The much-lauded Inflation Reduction Act (IRA), the crown jewel of the Biden-Harris administration.


The law was supposed to cap premium increases at 6 percent. So what happened? The authors of the law designed the cap to only apply to a portion of the premium, not what seniors actually pay for coverage. But the Democratic magicians have a trick up their sleeve: a "demo" program that will make these premium hikes mostly disappear -- at least until after the election.


This magical act of fiscal trickery involves a three-year,  $72.5 billion taxpayer-funded bailout program. It's a dazzling display of creative accounting, complete with a $15 add-on payment to insurers for each senior they enroll in a participating plan, a limit on annual premium increases, and reduced risk for insurers.


It's a win-win for the Biden-Harris Administration and Part D plans -- but an absolute loss for the American taxpayer. This trick transforms the Medicare program from a carefully balanced risk-sharing arrangement into a taxpayer-funded safety net for plans.


The IRA, in its zeal to "fight Big Pharma," has inadvertently become a sprawling mechanism for raising taxes and expanding subsidies, turning the well-loved, privately managed Part D benefit into a government run nightmare. This "demo" is nothing more than a multibillion-dollar band-aid, desperately applied to mask the true costs of the IRA from seniors -- and voters -- until after the ballots are counted.


Because as any seasoned observer knows, in politics as in magic, what vanishes must eventually reappear. The premium spike hasn't been eliminated; it's merely been postponed.


This "demo" program is not just a stopgap measure, though. It's a tacit admission of policy failure. If the IRA was the fix it was promised to be, why the need for this elaborate, costly workaround?


The answer is clear and damning: the IRA, in its current form, is unsustainable without massive, ongoing government bailouts. Congress must work towards a long-term solution to fix the law and rebalance risk across taxpayers, insurers and Medicare beneficiaries.


Joel White is the President of the Council for Affordable Health Coverage, a non-profit advocacy organization that seeks to lower the cost of health care for all Americans. This piece originally ran in Townhall.

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