Guthrie, Buchanan Lead Letter to CMS Administrator Regarding IRA Policy Failures Harming Seniors

WASHINGTON, D.C. - Congressman Brett Guthrie (KY-02), who serves as the Chair of the Health Subcommittee on the House Energy & Commerce Committee, joined by Rep. Vern Buchanan (FL-16), and numerous Republican colleagues from the House Energy & Commerce Committee wrote to Centers for Medicare & Medicaid Services (CMS) Administrator Chiquita Brooks-LaSure expressing significant concerns regarding the recently announced Medicare Part D Premium Stabilization Demonstration program to cover for significant premium spikes caused by Inflation Reduction Act failures. The Demonstration will cost taxpayers more than $5 billion per year for the next three years, potentially leave seniors on fixed budgets paying more in future years, and lead to less access to the drugs seniors rely upon.

Key Excerpt:

"We have significant concerns and questions regarding the recent Centers for Medicare and Medicaid Services' announcement on July 29, 2024, relating to the Medicare Part D premium stabilization demonstration. Well before 2025 plan year bids were submitted, there were flashing warning signs from prescription drug plans (PDPs) that seniors would face significant increases to their premiums in 2025 as a direct consequence of Biden-Harris policies.

The Inflation Reduction Act (P.L. 117-169) redesigned the Medicare Part D prescription drug benefit. The most notable changes to the benefit include increasing the liability on Part D plans in the catastrophic phase of the benefit, capping base premium growth for Part D plans by no more than 6% from the previous year through 2028, and capping beneficiary annual out of pocket spending at $2,000, scored at roughly $25 billion over 10 years by the Congressional Budget Office."

…

"Your demonstration, however, takes the opposite approach and puts increased burden on hard-working taxpayers that will only cause more long-term uncertainty in this critical program and drive higher spending for years to come. Despite the statute not requiring Section 402 demonstrations to be budget neutral, the Office of Management and Budget in addition to CMS have previously indicated their policy preferences for these demonstrations to be budget neutral. We therefore have substantial long-term budgetary concerns that could impact the viability of the Medicare program, especially the Medicare Part D program because your agency notes you expect this to cost taxpayers $5 billion in 2025, and possibly much more in subsequent years."

Background

• On July 29, 2024, the Centers for Medicare and Medicaid Services announced a Medicare Part D premium stabilization demonstration.
  • This demonstration came as a complete surprise as it was not included in the annual rate notice for Plan Year 2025 which was released in April 2024.
  • CMS gave plans 5 days to decide whether or not to participate in the demo or plans would be prohibited from participating in future years.
  • The demo further places caps on premium growth at $35 annually for participating plans, buys down premiums at $15 across the board for all participating plans. These premium caps are on top of the 6% year-over-year base premium cap included in the IRA that was part of the cause for premium increases last year and the cause for premium increases in Plan Year 2025.
  • In 2024 the average standalone Part D plan premium averaged $48, representing a 21% increase compared to 2023, and the number of plans available to seniors decreased by more than 10%.
  • CMS' bid data for 2025 shows the national average bid increased by 179% from the previous year for Part D plan sponsors.