Sen. Rand Paul (R-Ky.) accused the Biden-Harris administration of misusing $5 billion in Medicare funds to influence the election. The administration's Medicare Stabilization Program, introduced in July 2024, is ostensibly aimed at lowering premiums for seniors. The senator questions whether this is a strategic move to appeal to voters.
The program is part of a three-year initiative managed by the Centers for Medicare and Medicaid Services (CMS). The goal is to prevent rapid increases in Medicare premiums. But Sen. Paul has expressed concern that this would violate the Hatch Act, which prohibits using taxpayer funds to influence election results.
Paul's letter to the Department of Justice
On Friday, Paul shared with X a formal letter dated the same day. The letter was addressed to the head of the Department of Justice's (DOJ) Public Integrity Division. In it, Paul called for an investigation into the legality of the administration's actions.
Paul wrote,
Kamala Harris cast the tie-breaking vote to pass the Anti-Inflation Act, which currently raises health insurance premiums for seniors. As seniors head to the polls, Americans deserve to know whether Biden and Harris are illegally handing over taxpayer dollars to insurance companies to hide premium increases.
According to the letter, the senators “plan to disburse more than $5 billion in taxpayer-funded subsidies to insurance companies to offset Medicare premium increases by the November election. We are seeking additional information regarding this.”
Paul's focus is on the timing of the initiative. He claims this may be a politically motivated attempt to cover up Medicare premium increases due to the Inflation Control Act of 2022 (IRA). In his letter, Paul highlighted that Medicare premiums will skyrocket by 21% in 2023 alone, placing a financial burden on many seniors. But “in a non-election year, the Biden-Harris administration remained silent and routinely ignored concerns about the costs associated with IRA provisions.”
Paul also questioned the legal basis of the “plan.” He argued that efforts to justify the subsidies “lack budgetary analysis and credible research objectives.” Additionally, Paul noted that “several reports have cast doubt on the legitimacy of this bizarre program.” He noted that both the Government Accountability Office (GAO) and the Office of Management and Budget (OMB) condemned similar demonstration programs during the previous administration.
Premiums are expected to rise again in 2024, and Paul argued the $5 billion in subsidies could mask the negative effects of the Inflation Control Act (IRA). He suggested that the subsidies, rather than addressing long-term Medicare issues, could temporarily lower premiums and help create a favorable election outlook.
Even more serious is Paul's suggestion that the administration's actions may violate federal law. The senator cited 18 U.S.C. Section 595, part of the Hatch Act of 1939, to argue that the Biden-Harris administration may be illegally interfering with the election.
Paul wrote,
It is hard to imagine a more decisive action by the Biden-Harris administration to influence an election than spending billions of taxpayer dollars to cover up the much-touted negative effects of its own IRA.
The senator called for an immediate investigation by the Justice Department. He asked the Senate Homeland Security and Governmental Affairs Committee to receive its findings by October 16, 2024. Mr. Paul's letter also called for full transparency of communications and documents related to the Medicare Stabilization Program.
The revelations coincide with reports that the Biden administration is using taxpayer funds to send emails praising Vice President Kamala Harris to Medicare beneficiaries. These developments have raised concerns about the use of public funds for political purposes.
IRA and medical expenses
The Biden administration is said to be making efforts to reduce health care costs a centerpiece of its presidential election campaign.
A major focus of these efforts is negotiating lower prices for 10 high-cost prescription drugs covered by Medicare, which is expected to result in savings of $6 billion by 2026. Additionally, the administration is emphasizing lower coinsurance premiums for 54 Medicare Part B drugs, an initiative the White House has touted as a major win for seniors and people with disabilities.
However, IRAs have faced considerable criticism, particularly regarding their broader impact on inflation and health care costs. One of the main criticisms revolves around the law's unintended consequences, such as rising Medicare premiums. As Senator Paul pointed out, Medicare premiums jumped 21 percent in 2023. Conservatives rightly argued that this surge was due to the costs associated with implementing the IRA's provisions.
Opponents argue that in addition to increasing immediate costs, IRAs could exacerbate inflation in the medical sector. Critics say the law could discourage drug innovation by forcing drug companies to lower prices through government negotiations. This, they argue, could reduce new treatments and medical advances. Due to decreased profits for pharmaceutical companies, research and development may be delayed. This may ultimately limit the availability of future treatments.
Additionally, concerns arise about the overall cost of this legislation to taxpayers. The Congressional Budget Office (CBO) estimates that drug price negotiation provisions could save Medicare about $100 billion over the next 10 years. But critics argue that the law's subsidies and price control mechanisms could offset these savings.
They warn that IRAs may only lower drug prices in the short term. However, it could create long-term financial burdens on the federal budget. This could lead to increased inflationary pressures and potential economic instability.
government waste
As the Biden administration's approach to the use of Medicare funds continues to come under scrutiny, a recent report from Open the Books found that inadequate payments in Medicare and Medicaid are a major source of government waste. revealed. In 2023 alone, these two programs generated $101.5 billion in erroneous payments. These improper payments, including overpayments, underpayments, and outright fraud, continue to burden the federal budget at alarming rates.
