Report: Dems Shovel Billions To Illegals And Insurance Companies
The Congressional Budget Office (CBO) recently released two reports that highlight significant misallocation of taxpayer dollars, particularly concerning healthcare spending for migrants and changes in Medicare due to the Inflation Reduction Act.
The first report focused on “emergency” Medicaid expenditures for migrants, revealing that spending has dramatically increased from $900 million in fiscal year 2017 to over $2.7 billion by the end of fiscal year 2023, primarily after President Biden’s administration took office. This spending includes care for emergencies and deliveries for individuals who may not qualify for full Medicaid benefits, reflecting how open border policies have contributed to rising costs.
The second report analyzed the effect of the Inflation Reduction Act on Medicare Part D prescription drug costs. Originally projected to increase by 26%, the CBO found that actual bids for 2025 are expected to rise by 42%. This discrepancy suggests that federal spending on Medicare could increase by $10 billion to $20 billion, contradicting prior claims that the Act would reduce the deficit by $58 billion over ten years.
the CBO’s findings indicate that both the spending on emergency Medicaid and the anticipated costs related to the Inflation Reduction Act will lead to a substantial increase in federal spending, likely exacerbating inflation rather than alleviating it, contrary to the bill’s title.
Members of Congress may have decamped Washington to campaign for reelection, but in nondescript buildings near Capitol Hill, federal budget gnomes continue their work. The Congressional Budget Office (CBO) recently released two reports illustrating how billions of taxpayer dollars get spent on the wrong priorities.
The two reports to the House Budget Committee quantified Medicaid payments made for the care of illegal immigrants and recent changes in Medicare spending due to a bill Democrats passed two years ago. The analyses demonstrate how the Inflation Reduction Act has proved anything but and how the border nightmare on Joe Biden and Kamala Harris’ watch has increased spending.
Migrant Spending Skyrockets
The first report totaled spending on “emergency” Medicaid services provided to migrants since 2017. Under federal law, only qualified aliens — including people like legal permanent residents (i.e., green card holders), refugees, and parolees into the United States — are eligible for full Medicaid benefits, and only then after a five-year waiting period. In other cases, CBO notes that individuals who otherwise would qualify for Medicaid but for their immigration status can receive “care for medical emergencies that require immediate attention to prevent serious harm, disability, or death; they may also qualify for emergency labor and delivery services.”
As this table from the report demonstrates, federal spending on such services more than tripled over the relevant period, from $900 million in fiscal year 2017 — the first year of Donald Trump’s administration — to over $2.7 billion in the fiscal year that ended last Sept. 30:
The report also shows the explosion of spending on such services immediately after Biden took office, with both federal and total emergency Medicaid spending more than doubling from fiscal year 2020 to fiscal year 2021.
Note also that this $26.6 billion in spending on “emergency” Medicaid services does not include the funds that states like California, Illinois, and others are using to provide health benefits to illegal immigrants. States that have expanded such programs did so using state funds only, which are not included in the data above. Put another way, the tens of billions of dollars listed in the graph significantly underestimate the cost of providing health care to migrants who have come to the United States.
Unfortunately, CBO notes that a lack of data means the analysis cannot quantify how much of the spending comes from qualified aliens in the five-year waiting period, parolees into the United States, legally present individuals here temporarily, and individuals illegally present. However, CBO’s prior analysis of the border bedlam, which noted a significant spike in the latter category at the same time emergency Medicaid spending skyrocketed, tends to point the finger at the Biden administration’s open border policies.
Raising Medicare Spending
The second report examined changes in the Medicare Part D prescription drug program created by Democrats’ Inflation Reduction Act. Examining prescription drug plans’ actual bids for 2025 — when structural changes to the benefit, along with a $2,000 cap on seniors’ out-of-pocket expenses, take effect — CBO found that the plans’ estimation of their costs exceeded the budget office’s original 2022 estimates by 16 percentage points.
Whereas CBO originally projected that insurers’ bids would rise by 26 percent from 2024 to 2025, the actual bids came in at a 42 percent increase. As a result, the budget office projects that this “growth in plan costs will result in an increase in federal spending of $10 billion to $20 billion in calendar year 2025, compared with our earlier estimates.”
This stunning development again demolishes the notion that Democrats’ 2022 spending spree will lower the deficit — or inflation. At the time, CBO alleged that the bill would reduce the deficit by $58 billion over 10 years. But with the Medicare Part D changes costing far more than expected, that supposed deficit reduction will evaporate in just a few years’ time.
The estimated increase in Medicare spending coincides with an explosion in the estimated costs of the energy subsidies and other green pork included in the Inflation Reduction Act. Recall that in the Inflation Reduction Act, “Democrats use[d] Medicare as a piggy bank,” raiding the program by hundreds of billions to fund climate giveaways for Teslas and other pet projects. Now CBO has concluded that both the Medicare and climate portions of the law will cost far more than originally projected.
The end result? The “Inflation Reduction Act” will raise federal spending, and therefore inflation, by hundreds of billions of dollars at minimum. Somewhere, retiring Sen. Joe Manchin, I-W.Va., who was responsible for this monstrosity, should be removing the “Kick Me” sign from his back — a purported fiscal hawk naively signing off on a bill that will instead send the deficit even higher.
Billions in Insurer Bailouts
With the cost of the Medicare Part D changes skyrocketing, what did the Biden administration propose? A legally dubious bailout designed to prevent insurers from raising seniors’ premiums or dropping coverage right before the presidential election in November. CBO confirmed the estimated $5 billion cost of the program for 2025 alone — plus another $2 billion in projected interest costs. The budget office also revealed that “the average payment” to each insurer in 2025 “will be approximately $100 million.” As the saying goes, that’s nice work if you can get it.
Taxpayer giveaways to insurance companies and illegal immigrants may represent Democrats’ idea of “progress.” But it doesn’t mesh with most Americans’ priorities — and, with the federal government over $35 trillion in debt, is the last thing our nation can afford.
Chris Jacobs is founder and CEO of Juniper Research Group, a policy consulting firm based in Washington, and author of the book “The Case Against Single Payer.” He appeared in the 1995 “Jeopardy!” Teen Tournament and is on Twitter: @chrisjacobsHC.
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