The Congressional Budget Office (CBO) has released an analysis indicating that the Biden administration's newly announced Medicare prescription drug premiums may cost taxpayers more than $21 billion over three years if implemented. This analysis follows concerns raised by Republican lawmakers regarding the budgetary impact of the new program.
According to the CBO, the increase in federal spending is projected to range from $10 billion to $20 billion in 2025. House Budget Committee Chairman Jodey Arrington criticized the administration's handling of the Inflation Reduction Act, claiming it has led to skyrocketing Medicare prescription drug plan premiums.
The CBO's analysis states that the average plan bid for standard Part D coverage will increase by 179% in 2025, driven partly by underestimations of federal contributions to the Part D changes. Arrington emphasized that this new program could cost taxpayers $7 billion in 2025 alone.
Almost 60% of Part D enrollees are covered through Medicare Advantage plans, with the remaining enrollees using stand-alone prescription drug plans. The CBO expects changes to temporary subsidies and risk corridors will add $5 billion to federal spending in 2025.
Critics, including Senate Budget Committee Ranking Member Chuck Grassley, argue that the administration's actions are an attempt to mask the consequences of previous Medicare changes, which they claim have resulted in higher costs and fewer options for seniors.
The Centers for Medicare & Medicaid Services (CMS) Administrator Chiquita Brooks-LaSure defended the program, stating that negotiated drug prices would ultimately save Medicare and taxpayers billions while providing better access to necessary medications.
This situation raises significant concerns regarding the fiscal implications for U.S. taxpayers and the potential impact on millions of Medicare beneficiaries.