The nonpartisan Congressional Budget Office (CBO) has issued its fiscal analysis of the Biden-Harris administration’s Medicare Part D Premium Stabilization Demonstration Program. The CBO estimates that the program—which the Centers for Medicare & Medicaid Services (CMS) launched to artificially lower the rising premiums for seniors—could cost taxpayers more than $21 billion over three years if it moves forward as planned.
The CBO conducted its analysis at the request of Senate Budget Committee Ranking Member Chuck Grassley (R-Iowa) and House Budget Committee Chairman Jodey Arrington (R-Texas), along with Senate Finance Committee Ranking Member Mike Crapo (R-Idaho), House Energy and Commerce Committee Chair Cathy McMorris Rodgers (R-Washington), and House Ways and Means Committee Chairman Jason Smith (R-Missouri).
“When Democrats made big changes to Medicare two years ago, they set seniors up for more expenses and fewer options. This nonpartisan CBO analysis confirms that CMS’s cost-shifting plan is a dishonest election year trick to cover up those consequences. Rather than addressing its partisan mistakes, the Biden-Harris administration threw taxpayer dollars at the problems it created, putting Americans on the hook for tens of billions more dollars.”
Sen. Chuck Grassley (R-Iowa)
“As predicted, the Biden-Harris Inflation Reduction Act not only reduced investment for new cures but also caused Medicare prescription drug plan premiums to skyrocket. Democrats are now scrambling to cover it up before the election. In July, the Biden-Harris CMS quickly created a new federal program that will send billions of tax dollars to large health insurance companies to hide a major flaw in their so-called Inflation Reduction Act. Today, the CBO confirmed that the administration’s last-minute attempt will cost taxpayers a staggering $7 billion next year alone and $21 billion over the planned three-year demonstration, adding to the more than $2 trillion in Biden-Harris executive spending.”
Rep. Jodey Arrington (R-Texas)
CBO findings of note:
- Compared to previous projections, CBO expects federal Medicare Part D spending to rise by $10-$20 billion in 2025 due to the Democrats’ Inflation Reduction Act. The demonstration’s temporary subsidies will increase federal spending by another $5 billion and raise net spending on interest by $2 billion.
- The demonstration program increased plans’ expected benefit payments, which contributed to a large rise in the amount plans bid for 2024-2025. These higher bids result in increased premiums for beneficiaries, as well as higher federal subsidies to Part D plans.
- The demonstration’s taxpayer-funded payments to Medicare prescription drug plans (PDPs) cover costs that Part D enrollees would otherwise have to pay.
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