The Biden administration is touting the Inflation Reduction Act as a transformative piece of legislation. The reality tells a different story for millions of seniors relying on Medicare. Rather than prioritizing older Americans, this act has raided Medicare to fund a broader agenda, diverting billions from healthcare to unrelated spending projects. As Americans grapple with higher costs and fewer options in Medicare, it’s essential to expose the effect of these policies.
The staggering $260 billion the IRA raided from projected Medicare savings and funneled to projects like tax credits for electric vehicles and solar energy is at the heart of the issue. According to the Congressional Budget Office, these funds could have been used to strengthen Medicare but were squandered on political agendas that have nothing to do with healthcare.
In 2023, $10 billion of Medicare spending was paid in electric vehicle and solar energy tax credits. Simultaneously, large subsidies continued to fund prominent insurer-Pharmacy Benefit Managers and other non-Medicare programs.
The administration initially promised the spending bill would significantly lower drug prices for seniors. However, since the bill’s passage, Medicare premiums have surged by more than 20 percent on average, with some states experiencing more than 50 percent hikes. This is only the beginning, as insurers have warned their beneficiaries that hikes will continue to rise. Additionally, the administration has introduced a last-minute “demo” project, which the CBO just revealed would gut at least $21 billion from the Medicare Trust Fund to prop up big insurers— without congressional approval. This leaves seniors with fewer drug plan options and, for many, the uncertainty of whether their current plan will even exist next year.
Despite the White House’s talk about reforming the practices of big insurer-PBMs, the IRA quietly slipped in a provision that extended a little-known exemption these health cartels have from federal anti-kickback corruption laws. Although it may seem insignificant, these integrated conglomerates can legally pocket significant drug pricing rebates initially intended to lower patient costs. Instead of promoting savings for Medicare beneficiaries, they are being consumed by PBMs, which gives insurance oligarchs more reason not to oppose the IRA. While the White House publicly criticizes the influence of large corporations, the IRA’s provisions speak volumes about its priorities.
Perhaps the greatest betrayal comes from the so-called Medicare “negotiations” the administration has championed. With $260 billion already siphoned off for non-healthcare spending, President Biden proudly publicized drug price “negotiations” as one of the most significant milestones in healthcare. The reality is that 67 million seniors enrolled in Medicare will only save $1.5 billion collectively. Not only are these savings minimal, but they will also likely lead to intense Part D premium spikes. For millions of older Americans, this delayed relief means more waiting and financial strain.
The administration has claimed a victory on drug prices, but for many seniors, it feels more like a swindle. The IRA’s windfalls have gone to corporate interests, while seniors are left with higher costs, fewer options, and no real relief. This isn’t the Medicare reform Democrats promised older Americans — it’s a raid on Medicare, and America’s seniors are counting on Republicans in Congress to reignite their fight against the disastrous spending bill.
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