Grassley Spotlights IRA’s Unintended Health Care Consequences, Obamacare Fraud at Finance Committee

Grassley Spotlights IRA's Unintended Health Care Consequences, Obamacare Fraud at Finance Committee

WASHINGTON - At today's Senate Finance Committee hearing on health care costs, former chairman and current senior member Chuck Grassley (R-Iowa) discussed his bipartisan work to bring transparency to opaque pharmaceutical industry middlemen. He asked about the Biden-Harris administration's program to mask how the Inflation Reduction Act (IRA) has hiked seniors' premiums and reduced plan options, as well as fraudulent Obamacare subsidies.

VIDEO

Excerpts from Grassley's exchange with witness Mr. Theo Merkel, Senior Research Fellow at the Paragon Health Institute, follow.

Holding pharmacy benefit managers (PBMs) accountable:

Grassley: "We know PBMs are getting away with shady, anti-competitive practices that are costing patients more and taking a toll on rural drugstores. The [IRA] did nothing to address powerful prescription drug middlemen driving up drug costs. In this Congress alone, four Senate committees, including this committee, have advanced bipartisan PBM bills that have garnered the support or co-sponsorship of 68 senators. There's no reason these bills should not be advanced."

The Biden-Harris administration's Medicare Part D cost-shifting plan:

The Biden-Harris administration launched a demonstration program to artificially lower premium payments with taxpayer dollars, bailing out big health insurers and covering IRA flaws. Grassley requested the nonpartisan Congressional Budget Office analyze the fiscal implications.

Grassley: "Why is the Biden administration establishing this cost-shifting policy, and how much money will this cost taxpayers?"

Merkel: "The IRA took a previously bipartisan idea - there was a lot of support for the out-of-pocket cap in Medicare Part D - but it moved away from bipartisan discussions to shift the proposal in a way that would cost more for taxpayers, and potentially cost more to beneficiaries and higher premiums.

"In the underlying IRA, there was a program to artificially keep premiums low for about six years; it was going to cost around $40 billion. But even that wasn't enough. What the administration has done is, they saw there was a premium spike last year. They were very concerned about a premium spike this year. So they have created, as has been mentioned, a 402 demonstration project that basically just pays Part D plans, CMS is saying, around $5 billion in just one year to keep their premiums lower."

Fraudulent Obamacare subsidies:

Grassley wrote the Department of Health and Human Services (HHS) citing a study that found five million individuals may have falsely reported their income to qualify for Obamacare subsidies. He demanded information on HHS' controls to stop this abuse and the actions it's taking to address the issue. HHS had not responded as of September 17, 2024.

Grassley: "This overestimate of income comes with a price tag of $20 billion just this year. HHS says it's working to combat unauthorized and fraudulent activity in Obamacare. Should we believe they're accomplishing that?"

Merkel: "[…] There is no sense, that I can tell, that they appreciate or are willing to be forthcoming about the potential magnitude of this. They have announced that they are going after 200 brokers. There absolutely is some activity where unscrupulous brokers are switching because of very, very lax program integrity controls - people into plans without their knowledge. However, this is just the tip of the iceberg. I appreciate your interest in pushing them for more answers on this. I think [HHS] likely announced that minor action in hope it blows over."

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