Harris Cast the Tie-Breaking Vote For a Bill That’s Bankrupting Medicare 

A new government report warns the effects of the misleadingly-named Inflation Reduction Act (IRA) is raiding Medicare Part D, treating the prescription drug program for seniors as a piggy bank for the reckless spending in a bill passed with Vice President Kamala Harris’ tie-breaking vote.

As the Committee to Unleash Prosperity notes, “Medicare’s drug program is suddenly under severe financial stress, with insurers to exit the market and seniors to lose coverage unless insurers are bailed out tens of billions of dollars. The ‘root cause’ is the IRA.”

University of Chicago economics professors Casey Mulligan and Tomas Philipson cautioned in 2022 that the IRA’s insurance price controls and “redesign” mechanisms hampered insurers’ ability to finance prior benefit levels for the 2025 plan year (signups begin next month):

President Biden has accused Republicans of scheming to cut Medicare. In fact it is his signature legislation, the Inflation Reduction Act, that will lead to benefit cuts and premium increases for seniors. Medicare’s popular drug-coverage program is headed for a painful amputation.

Ignoring this warning from Mulligan and Philipson, the Biden administration is scrambling to push the bad news past the election with a last-ditch regulatory bailout. The Wall Street Journal reports:

CMS usually announces preliminary Part D premiums in July. Not this year. Instead, CMS unveiled a “demonstration project” that would impose “a year-over-year increase limit of $35” for premiums while boosting payments to insurers…

As CMS acknowledges, one goal of shifting costs to insurers in the Part D redesign was to force them to reduce drug spending: “By design, plans will have more liability requiring them to better manage costs.” This was a back-door way for Democrats to ration access to costly drugs while shifting the political blame for doing so to insurers.

The gambit backfired as insurers are raising premiums. CMS’s intervention is another example of how the IRA will cost far more than Democrats claimed. Nobody knows how much more since CMS isn’t doing a normal rule-making that requires a cost analysis.

Numerous economists show the IRA has already contributed heavily to America’s painful inflation—20% cumulatively since the Biden-Harris White House began. The collapse of Medicare Part D and its subsequent price hikes is the latest illustration of how government control distorts markets, wreaking havoc on families.