Biden spent billions to delay Medicare premium hikes and protect Harris campaign ahead of election

Earlier this year, Democrats faced a horrific reality: The patient out-of-pocket cap to curb Medicare drug costs, passed as part of Biden’s Inflation Relief Act, was set to dramatically increase premiums for millions of seniors in just a few weeks. before the 2024 Presidential elections.

To avoid the political disaster of raising premiums in the middle of a closely contested election, the Biden-Harris administration used its authority to redirect allocated funding to subsidize premiums for seniors until after the election.

The administration’s $5 billion budget ploy eliminates the proverbial can down the road, but only adds to an estimated possible $20 billion in additional spending over three years to cover up the unintended consequences of one of the Biden-Harris administration’s signature lasers.

While they free up Democratic candidate Kamala Harris to tout restrictions in her key middle-class economic plan, the subsidies will come at a cost to taxpayers and seniors in the long run.

“They created a new program that will send billions to health insurance companies … to temporarily offset rising premiums,” said Rebecca Weber, CEO of the Association of Mature American Citizens (AMAC). John Solomon Reports podcast.

“You could say they’re buying up money from big insurance companies right before the election. And taxpayers, it’s important that people understand this, taxpayers pay bills today, seniors will pay tomorrow,” she added.

Medicare Part D premiums were slated to increase in October at the start of open enrollment following pressure on insurance companies brought on by the Curtail Inflation Act’s imposition of caps on drug prices, one of the signature legislative initiatives of the Biden-Harris administration.

That could spell political disaster for Democrats and their candidate, who boasted of casting the decisive vote to pass the bill.

But the administration intervened to prevent disaster. The Centers for Medicare and Medicaid Services announced a new premium stabilization program called the demonstration in July. The program will provide a total of approximately $5 billion in subsidies to insurance companies to cover the cost of price caps and other impacts of the Inflation Relief Act.

Before the subsidies were introduced, a price cap plan had already been established to increase federal spending after the Congressional Budget Office found that the fiscal impact of the Inflation Reduction Act had been underestimated.

An analysis requested by Republican critics of the administration’s plans said changes made to Medicare by the law would likely cause the new average plan price for standard Part D coverage to increase by a whopping 179% in 2025 without intervention.

“CBO expects that the additional plan spending reflected in these proposals will result in an increase in federal spending of $10 billion to $20 billion in calendar year 2025 compared to our previous projections,” CBO said.

CBO Report:

But the new subsidy will help counteract increases in premiums by further raising the costs of changes to the Inflation Relief Act.

The Biden-Harris administration’s motives seemed clear when their plan was announced this summer.

“Biden Admin Will Spend Billions to Contain Soaring Medicare Drug Premiums,” read one Politico headline. “A move to protect some older Americans from higher costs could come just before the election.”

The move drew criticism from Republicans. “One of @POTUS’s signature domestic achievements is poised to trigger a significant surge in Medicare premiums for millions of Americans ahead of the November election,” wrote X GOP Sen. Bill Cassidy, R-Louisiana. “Now its Admin is preparing to distribute billions of dollars to private insurance companies…”

But Harris received little publicity for the move and continues to campaign for the decisive votes that passed the Inflation Reduction Act and the price caps it contained. With the premium crisis averted, the subsidy plan allowed Kamala Harris to launch a campaign to tout her administration’s efforts to lower prescription drug costs and preserve Medicare.

“Vice President Harris, along with President Biden, took on Big Pharma and won,” Harris’ campaign statement, “A New Path Forward for the Middle Class,” states. “They lowered drug costs for millions of seniors by passing the Inflation Reduction Act, which allowed Medicare to negotiate drug prices with big pharmaceutical companies for the first time in history and set a $2,000 cap on all out-of-pocket drugs. cost.”

Harris’ plan conveniently ignores the growing deficit associated with the Medicare Inflation Reduction Act changes (costs that will be borne by future taxpayers) as well as the administration’s gimmick of subsidies to keep prices from rising in the short term.

At the same time, Harris promised to “defend Social Security and Medicare from the relentless attacks from Donald Trump and his extreme allies” and “will strengthen these programs for the long term.”

But experts say older people have suffered the most from the Biden-Harris administration’s intervention in the Medicare program and out-of-control federal spending.

“Older people have suffered the most from Biden’s inflation policies because they have lost money,” said Stephen Moore, an economist and former Trump adviser. John Solomon Reports podcast.

“Who is the biggest victim of inflation? Well it’s always people living on a fixed income and life savings and suddenly those life savings are 20% less than they were, you know when Biden took office their 401k plans were ruined and bonds didn’t either have proven themselves very well.” said Moore.

“And then you add on top of that… they’re stealing money from Medicare, which will only hasten the date when you find out that Medicare is going to run out of money,” he added.