Future Retirement Success
  • Politics
  • Business
  • Investing
  • Stocks
  • Politics
  • Business
  • Investing
  • Stocks

Future Retirement Success

Investing

How to Skirt Congress, Hide Medicare Costs, and Buy Votes in an Election Year

by October 5, 2024
October 5, 2024
How to Skirt Congress, Hide Medicare Costs, and Buy Votes in an Election Year

Michael F. Cannon

President Joe Biden has touted how the Inflation Reduction Act (IRA) gives Medicare the power to negotiate lower drug prices. He has boasted that this new authority will save $6 billion in its first year.

As I explained at the policy forum, “At What Price: Determining Pharmaceutical Prices in Medicare,” however, the IRA contains other provisions that will increase Medicare spending on prescription drugs for seniors. In particular, it provides a 100 percent subsidy for drug spending after Part D enrollees spend $2,000 out of pocket. The Congressional Budget Office estimates that the out-of-pocket-spending cap and other provisions of the IRA will nearly triple the per-enrollee cost of Part D. Congress could have appropriated additional funds to prevent that additional expense from increasing Part D premiums. It chose not to do so.

CBO Table 1: Information from the 2024 and 2025 Part D bid announcements

That presented the Biden–Harris administration with a problem. Left to its own devices, federal law—which is to say, Congress—would dramatically increase Part D premiums right before this November’s presidential election. Angry seniors could take out their frustrations on the Democratic nominee, Vice President Kamala Harris.

So the Biden administration struck upon a scheme: spend taxpayer dollars on a sham Medicare “demonstration program” that hides from enrollees the cost of the IRA’s expensive new coverage by shifting that cost to taxpayers. Federal law allows Medicare to create demonstration programs that test new ideas (payment reforms and the like) in small corners of the Medicare program. The Biden–Harris administration (ab)used that authority to create a “demonstration program” that offers all insurers who participate in Part D new, temporary subsidies—if they pledge not to increase premiums before Election Day.

The Biden administration is literally spending money Congress chose not to spend, increasing federal deficits and debt, to hide the cost of its health reforms, all in the service of buying votes for its presidential candidate in an election year. 

The Biden administration defends its sham demonstration program as “consistent with other demonstrations that [Medicare] has conducted in the past to address transitional issues associated with the implementation of major changes to the Medicare program.” Translation: Prior administrations were crooked too. It’s the sort of defense that reveals the situation is much worse than you thought.

The CBO estimates the all-in cost of the first year of Biden’s sham demonstration program will all but eliminate the same-year savings from Medicare negotiating lower prices for prescription drugs.

CBO estimate of the all-in cost of the first year of Biden–Harris Medicare Part D demonstration program

The episode illustrates why Medicare is neither efficient nor a sacred bond between the generations but rather the main force behind rising federal deficits and debt. Medicare is, and always has been, a tool for buying votes from seniors and high-cost, low-quality providers by skewering the least politically powerful people in the room—taxpayers. 

0
FacebookTwitterGoogle +Pinterest
previous post
Taiwan Arms Backlog, September 2024 Update: New Maintenance Sale and Details of Troubled PDA Transfer
next post
Senator Vance, Please Keep the Feds out of School Policing

You may also like

Congress Must Cut and Reform Medicaid

April 28, 2025

A Fine Pairing: Crypto x AI and a...

December 13, 2024

Biden Administration Proposes Tightening Protectionist Buy American Act

November 6, 2024

Friday Feature: The National Personal Finance Challenge

April 5, 2024

School Choice Madness: How I Picked My Teams

March 21, 2025

What Would Consumer-Regulated Electricity Look Like?

August 9, 2024

Argentina’s Paradigm Shift

November 21, 2023

Join Us in Person or Online, Sept. 12...

September 6, 2024

The Rights We Give Up under “Marsy’s Law”

June 2, 2023

Fact-Checking Biden’s Speech about US Conflicts

July 26, 2024

    Get free access to all of the retirement secrets and income strategies from our experts! or Join The Exclusive Subscription Today And Get the Premium Articles Acess for Free

    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • Trump warns of ‘serious consequences’ if Elon Musk funds Democrats

      June 7, 2025
    • Musk jokes about reconsidering stance on Big Beautiful Bill after Schiff’s praise

      June 7, 2025
    • Musk deletes explosive posts about Trump and Epstein files

      June 7, 2025
    • House witness flips script on Dem who ambushed him during hearing with unearthed tweet: ‘Iceberg is ahead’

      June 7, 2025
    • Call with China’s Xi, and Trump-Musk exchange fueled barbs during 20th week in office

      June 7, 2025
    • Trump’s conservative allies warn Congress faces critical ‘test’ with $9.4B spending cut proposal

      June 7, 2025

    Categories

    • Business (8,152)
    • Investing (2,019)
    • Politics (15,568)
    • Stocks (3,136)
    • About us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: futureretirementsuccess.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 futureretirementsuccess.com | All Rights Reserved