The Biden-Harris administration is facing criticism for using taxpayer funds to conceal impending Medicare premium increases ahead of the upcoming election.
As reported by Fox News, the administration has implemented a "demonstration project" to subsidize premiums, aiming to keep them artificially low despite expected hikes in Medicare Part D plans.
Critics argue that this move is designed to shield the administration from potential voter backlash. The Centers for Medicare and Medicaid Services (CMS) has introduced a three-year plan to subsidize premiums, which are expected to rise significantly due to provisions in the Inflation Reduction Act (IRA).
The subsidies are projected to increase dramatically, from $30 per recipient per month in 2024 to $142.70 in 2025. This substantial rise has sparked debates about the long-term impact on government spending and national debt.
Joe Grogan, a former adviser to President Trump, has been vocal in his criticism of the administration's approach. He argues that the move merely shifts costs rather than providing genuine relief to Medicare beneficiaries.
Grogan stated:
They've destroyed Part D premiums. I'm not sure it'll survive legal scrutiny if someone were to sue. Objectively, it shouldn't be done. It's just interjecting $5-$10 billion of taxpayer dollars, while the taxpayers are paying the price 85 days before an election. It's sickening. This is only going to get worse in 2025, 2026. The program is in a death spiral. They announced a three-year demo. It's already broken. The demo is going to fail. Premiums are still going to go up.
Research indicates that the cost of health care for retirees continues to escalate. A recent study by Fidelity, an investment research group, reveals that a 65-year-old retiring today can expect to spend $165,000 on health care in retirement.
This figure represents a 5% increase from the previous year and more than double the estimate from 2002. The research assumes enrollment in Medicare Parts A, B, and D, which cover most hospital care, doctor's visits, and prescription drugs.
Despite these projections, there appears to be a disconnect between expected and actual healthcare costs in retirement. The average American anticipates spending about $75,000 on health care and medical expenses, less than half of Fidelity's calculation.
According to the Centers for Medicare and Medicaid Services, approximately 67.3 million Americans were enrolled in Medicare as of April 2024. About half of these beneficiaries were enrolled in Medicare Advantage plans, while around 80% were covered by Medicare Part D.
The cost of prescription drugs has also seen a significant increase, rising nearly 40% over the past decade. This surge has outpaced inflation, adding to the financial burden on Medicare beneficiaries and the program itself.
Grogan suggests that the administration's current approach is unsustainable:
They just want to get through the election. They're hoping after the election they can face it, but it's gonna need to be dealt with in the next 12 to 18 months. They did not believe it would be this bad and it's only gonna get worse.
In conclusion, the Biden-Harris administration's use of taxpayer funds to mask Medicare premium increases has sparked controversy. Critics argue that this approach merely delays addressing the underlying issues in Medicare funding and costs. The significant increase in subsidies raises concerns about long-term government spending and debt. As healthcare costs continue to rise for retirees, the disconnect between expected and actual expenses remains a challenge. The administration faces pressure to address these issues beyond the upcoming election cycle.
