The New CMS Demo Is a Political Smokescreen
The Centers for Medicare & Medicaid Services (CMS) just unveiled a $7.2 billion "demonstration program" to shield seniors from skyrocketing Medicare Part D premiums. At first glance, it seems like a lifeline. In reality, it's a political smokescreen that favors insurers over patients and doctors, while masking deeper issues within our healthcare system.
The root of this crisis? The Inflation Reduction Act (IRA). CMS projected a staggering 179% increase in 2025 Part D bid rates -- which are, roughly speaking, the monthly cost of covering the typical senior -- due to the IRA's restructuring. Since premiums are tied to these rates, seniors face the prospect of their monthly prescription costs soaring. For those on fixed incomes, this spells disaster.
As a former physician, I've witnessed firsthand how Washington's policy decisions ripple through our healthcare system. The IRA has already caused significant disruptions: Part D premiums rose 21% in 2024 and the number of standalone drug plans dropped by 11%. Meanwhile, the law incentivizes insurers to increase their use of prior authorization and step therapy -- practices loathed by doctors and patients alike because they block or delay patients from getting the treatments they need.
The increased use of prior authorization and step therapy isn't just an inconvenience -- it's a fundamental shift in medical decision-making. It moves control from the exam room to the boardroom, from those who took an oath to help patients to those whose fiduciary duty is to shareholders.
The contrast with how physicians are treated is stark. For years, doctors have faced an annual ordeal known as the "doc fix" -- a yearly scramble to prevent steep cuts in Medicare reimbursements.
When insurers face financial pressure, CMS rolls out a $7.2 billion cushion. When doctors face pay cuts that could limit patient access to care, we get silence. No demonstration programs. No bailouts. Just more uncertainty.
As November elections loom, the political calculus becomes clear. A 179% premium hike would have been catastrophic for presidential candidate Kamala Harris and congressional Democrats' electoral chances. The demo conveniently obscures the IRA's failures, functionally providing a $7.2 billion bailout to bribe them into not hiking premiums as much as they otherwise would have to.
This short-term fix comes at a steep price. By raiding Medicare's already strained trust fund, we're asking taxpayers to prop up insurer profits. It's a politically expedient move that fails to address the root issues plaguing Medicare.
We need to ask ourselves: Is this the healthcare system we want? One where doctors spend more time arguing with insurance companies than caring for patients? Where seniors have to choose between their medication and their meals? Where billion-dollar bailouts for insurers take precedence over ensuring affordable, accessible care for all?
As physicians, we're trained to diagnose and treat the root cause of an illness, not just mask its symptoms. The CMS demo, however, does exactly that -- it masks the symptoms of a deeply flawed system without addressing the underlying disease.
Dr. Wolfgang Klietmann is a former clinical pathologist and medical microbiologist at Harvard Medical School.
