East Idaho Times

Lawmakers are urging the Government Accountability Office (GAO) to review the Medicare Part D Premium Stabilization Demonstration, recently announced by the Centers for Medicare & Medicaid Services (CMS). Concerns have been raised about its legality and potential impact on healthcare affordability for seniors. This initiative is part of a letter sent to GAO by U.S. Senate Finance Committee Ranking Member Mike Crapo (R-Idaho), U.S. House Ways and Means Committee Chair Jason Smith (R-Missouri), and U.S. House Energy and Commerce Committee Chair Cathy McMorris Rodgers (R-Washington).

The demonstration aims to reduce premiums for seniors, which are expected to rise significantly due to provisions in the Inflation Reduction Act's drug price measures. However, CMS has not provided any budgetary analysis or clear statutory basis for this proposal. Crapo, Smith, and McMorris Rodgers have requested that GAO examine the demonstration’s legality under section 402 of the Social Security Amendments of 1967, the budgetary analysis conducted by CMS, and the estimated budgetary impact.

In their letter, they stated: “We write to request that the Government Accountability Office (GAO) conduct an expedited review of the Part D Premium Stabilization Demonstration, as announced by the Centers for Medicare & Medicaid Services (CMS) on July 29, 2024... The initiative lacks any budgetary analysis, clear statutory basis, or credible research goals.”

They further noted that “[T]he policies advanced through the recently announced demonstration would simply shift costs from plan sponsors and enrollees to taxpayers, obscuring the law’s impacts without addressing their underlying drivers... Instead... this agency action seeks to sidestep Congress."

The letter highlights concerns over reduced choices and increased medication coverage costs since implementing IRA's drug pricing measures. Seniors have experienced a significant decrease in available plan options, with prescription drug plan offerings declining by 25 percent since 2020. Certain large insurers have exited this market segment entirely.

The lawmakers emphasize that such programmatic changes should fall within legislative purview rather than being executed as an agency action under a "demonstration project." They argue that durable solutions are needed within existing legal frameworks.

The letter concludes with specific questions for GAO regarding legal authority under section 402(a)(1)(A) of the Social Security Amendments of 1967, budget neutrality principles applied by OMB, comparison with previous demonstrations in terms of size and scope, participation timelines, and whether CMS can achieve its stated research goals through this demonstration.