EXCLUSIVE — Nearly 50 House Republicans are investigating efforts by the Biden-Harris administration to keep insurance premiums for Medicare prescription coverage low, which Republicans say is an illegitimate attempt to limit the fallout from the president's drug-pricing policies in the 2024 campaign cycle.
Rep. Brett Guthrie (R-KY), Energy and Commerce Subcommittee on Health chairman, told the Washington Examiner in an exclusive interview that Medicare Part D prescription drug premiums have dramatically increased since the passage of the Inflation Reduction Act in 2022, which was intended to lower healthcare costs for seniors.
Guthrie said that in response to rising premium costs, the Centers for Medicare and Medicaid Services intends to use dollars from the Medicare Supplemental Insurance Trust fund to subsidize insurance premiums and keep prices from rising dramatically right before the election.
“They’re robbing Peter to pay Paul,” said Guthrie, “But I’ve always heard if you rob Peter to pay Paul, Paul always votes for you. So it just seems like an election year gimmick.”
Guthrie told the Washington Examiner that CMS is “kind of baiting companies not to raise premiums” but using money from the Medicare Supplemental Insurance Trust Fund, which is used to fund both medical insurance under Part B and prescription drugs under Part D.
“To sum it up, we have their landmark prescription drug bill for seniors that is raising premiums when they went down under the Trump administration,” said Guthrie.
During the Trump administration, Medicare Part D and Medicare Advantage premiums decreased by 12%, and they even continued to go down during the first year of the Biden-Harris administration until the passage of the Inflation Reduction Act in 2022.
The individual retirement account, touted as President Joe Biden’s most significant achievement in healthcare, significantly altered key aspects of the Medicare program, including capping the price of insulin to $35 per month for Medicare beneficiaries as well as setting a cap of $2,000 for annual out-of-pocket prescription costs.
With all of these changes to the program, stand-alone Medicare Part D plan premiums increased by 21% in 2024 compared to last year, and the number of supplemental plans on the market for seniors decreased by more than 10%.
Although Part D plan premium costs for 2025 have not yet been announced, CMS has data on the projected costs since insurers must get their bids for prices approved by the agency.
That CMS data shows insurers needed to raise their prices by a national average of 179% in 2025 to provide the same level of coverage and account for the $2,000 prescription cap taking effect next year.
So, to offset these increased premiums, CMS proposed buying down Part D base premiums using money from the Medicare Trust Fund and capping year-over-year premium increases to $35.
A total of 48 Republicans from the committees on Energy and Commerce, Ways and Means, and Budget sent a letter Monday to CMS Administrator Chiquita Brooks-LaSure to inquire about the price offset proposal, which was not part of the administration’s plan when the premium-setting process started in early April.
The representatives said the Biden-Harris approach to lowering insurance premiums “puts an increased burden on hardworking taxpayers that will only cause more long-term uncertainty in this critical program and drive higher spending for years to come.”
“It really appears to me this is a last-minute approach to take away the shock people would feel by having increased premiums right before an election because the signature issue of the Biden-Harris administration did the exact opposite of what they said it was going to do,” said Guthrie.
Vice President Kamala Harris cast the tiebreaking vote on the IRA in the Senate and has made her support of the IRA a central portion of her campaign for the White House. Protecting and strengthening Medicare is also a prominent campaign promise.
As of 2023, 50.5 million people were enrolled in Medicare Part D supplemental insurance plans, which is more than half of the 66 million seniors covered by Medicare. Of those, 56% are enrolled in Medicare Advantage plans with prescription drug coverage, and 44% are enrolled in stand-alone prescription drug plans.
While on the campaign trail, Harris has also promised to expand the $35 per month insulin price cap and the $2,000 out-of-pocket maximum for prescriptions to everyone in the United States, not just seniors.
The rising costs of healthcare have been a central undercurrent of the 2024 election cycle, with nearly 90% of voters in May saying affordability of healthcare was either a “very big” or “moderately big” problem.
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When concerns are broken down by category, however, more people are worried about insurance premiums than other healthcare expenses, including the cost of prescription drugs.
Nearly half of insured adults, as of March, were worried about being able to pay their health insurance premiums. Those covered under Obamacare and those with employer-sponsored plans said their plans did not have enough covered expenses compared to their premium costs.
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