Earlier this month, Kamala Harris’ campaign announced it raised more than $200 million in the first week of her candidacy, following Joe Biden’s withdrawal from the presidential campaign. A far larger, albeit unofficial, in-kind contribution came via the federal Centers for Medicare and Medicaid Services (CMS), which announced a new “premium stabilization demonstration” intended to minimize premium increases for seniors’ prescription drug coverage during the campaign’s final stretch.
It’s the continuation of a pattern: the third use by Democrats in recent years of health insurer giveaways — bailouts of questionable legality — to protect them from political headaches.
Current Bailout
The CMS announcement came due to changes in the prescription drug benefit that Democrats passed in 2022’s so-called Inflation Reduction Act. The combination of richer benefits — including a decrease in seniors’ maximum out-of-pocket drug spend — and structural changes to the benefit design meant that the average monthly bid amount for standalone Part D plans nearly tripled compared to last year.
While not all of that increase would get passed through to seniors’ premiums, CMS conceded “more variation” in plan bids, with “resulting premium changes [that] could create disruptive enrollment shifts.” As a result, CMS announced a demonstration project under which Washington will assume greater responsibility for plans’ cost overruns and provide outright subsidies to insurers.
CMS claims the “additional premium stability” provided by these bailouts could “improve the predictability of [plan] offerings.” With open enrollment for 2025 starting on Oct. 15 — weeks before the November election
