Posted on Friday, November 1, 2024

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by The Association of Mature American Citizens

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On AMAC’s Better for America podcast this week, Committee to Unleash Prosperity President Phil Kerpen issued a dire warning to AMAC CEO Rebecca Weber about the hidden costs in the Biden-Harris “Inflation Reduction Act” – including the threat of rising Medicare premiums for seniors. Kerpen called the IRA “maybe the most misnamed bill since the Affordable Care Act,” explaining how it actually made inflation worse and stole billions from Medicare to fund Democrats’ Green New Deal ambitions.

The IRA “really was an attack on Medicare,” Kerpen said, “and it’s quite shameful that AARP endorsed it and supported it and pushed for it.” AMAC notably strongly opposed the IRA and organized a member-led effort to urge members of Congress to vote against the bill.

As Kerpen explained, the Biden-Harris administration paid for the IRA in two main ways. The first was massively expanding the size of the IRS by hiring 87,000 new agents to “go shake down and harass and audit people – and Democrats said that’s about going after the rich, but the rich have tax lawyers and accountants.”

The second way, he said, was to use Medicare as a “piggy bank” by “slashing prescription drug spending in Medicare by about 260 billion.” While some people might believe price controls for drugs are a good idea, he continued, “I think 90 percent plus of people can agree on is if you’re going to cut Medicare prescription drug spending by 260 billion, that money should have been kept in Medicare.”

Instead, it was funneled to Democrats’ climate change agenda and Green New Deal subsidies.

“The thing that drives me completely insane,” Kerpen said, “is the Democratic politicians who voted to do this – You are out there every day attacking Republicans for wanting to cut Medicare, and it’s you that actually did it.”

As a result, seniors were expected to be hit with notices of significant premium increases this fall – somewhere in the neighborhood of 50 to 100 percent. But instead, in order to avoid that political disaster so close to the election, the Biden-Harris administration effectively paid off insurance companies to avoid any premium rate hikes until after the election.

“They really abused their legal authority to do this,” Kerpen said. “They called it a demonstration program. I don’t know what they’re trying to demonstrate, except that, when you bribe companies to hide the cost of your own policies, they’ll say, yes, thanks.”

Essentially, Kerpen said, the Biden-Harris administration is now “spending tens of billions of dollars basically to cover up the harm that their bill did when they pulled all that money out.”

“All of this is bad,” Weber responded. “Everything from price controls and price fixing. It’s bad in the long run.”

“We see fewer drugs coming to market when that kind of thing happens, and we don’t let the free enterprise system work. The Congressional Budget Office, they report that this cost shifting policy is going to push Medicare costs onto taxpayers. Can you elaborate on the long term financial repercussions this could have, especially on future Medicare beneficiaries?”

“First of all, the price controls will definitely result in fewer new drugs being developed, fewer cures being developed,” Kerpen responded. “It really changes the incentive for research because now you don’t want that huge blockbuster drug. Maybe that cures a disease or is a really good game-changing drug, but if your drug is too successful you’re gonna get whacked with the price control and you’re not gonna get a return on investment.”

“And in the long term, that’s actually very negative for Medicare finances because if you have fewer new drugs being developed, new cures being developed, you’re going to spend a lot more on long term care.”

“However,” Kerpen continued, “I think the biggest problem from my perspective, in what they’re doing is if you can get away with using Medicare as a piggy bank for unrelated government spending, you’re going to go back to that again and again.”

“And they’re not going to stay with just price controlling ten drugs. They’re going to post price controls on more drugs. They’re going to expand this over time. They’re going to say, if we can get away with it, every time we need to pay for the next round of giveaways to whatever industry it is”

As Kerpen explained, Medicare beneficiaries are already seeing the negative consequences of the IRA. “We’ve seen a lot of the Medicare Advantage plans say, we’re not covering provider networks that we used to cover last year. And so you’ve got a lot of people right now that are getting letters in the mail, finding out, hey, the way that they’re dealing with the changes in Inflation Reduction Act, the way that they’re trying to save costs to deal with those changes, is I can’t go to the health system that I’ve been going to forever on the insurance plan that I’ve been on.”

Importantly, the Biden-Harris administration eliminated the rebate rule that the Trump administration implemented. As a result, seniors will end up paying more for prescription drugs.

Kerpen concluded by warning about “the malign influence of AARP,” which he called “the biggest problem that we have on all of these health care policy issues.”

“AARP has become basically an advocacy arm of the health insurance industry,” Kerpen said. “They exclusively only sell United Health plans and they skim five percent off the top of every monthly premium of every AARP branded United Health plan for the whole time you’re in it. And, by the way, this is the only junk fee that Biden and the Democrats allow because so much of that money goes into Democratic politics and advocacy and goes to feeding the cycle and they’ve become the main outside group supporting policies that are actually harmful.”

“We’ve got to support the politicians who opposed the Inflation Reduction Act. We’ve got to punish the ones who voted for it. There’s got to be some political accountability. These people deserve to lose,” Kerpen said.