A study recently released by the AARP, formerly the American Association of Retired Persons, attempts to rebut claims by” critics” of Joe Biden’s Inflation ( Reduction ) Act ( IRA )” that the law will lead to higher costs for enrollees”. It often cites figures like “94 percentage” to give the impression that most, if not all, elders will see benefits from the rules.  ,
The title, however, is less than what appears to be true, as with most AARP-related issues. In reality, 1 ) most seniors won’t benefit from one of the law’s main provisions, meaning they will suffer from higher costs, not lower ones, 2 ) the cost of the IRA has come in substantially higher than advertised, and 3 ) AARP and its paymasters will benefit financially from the IRA — which might explain why the organization “forgot” to mention items 1 ) and 2 ).
Smaller Fraction of Seniors Benefit
The new fatal cap on costs for Medicare Part D prescription drugs, which as of last year limited the number a recipient will have to pay at the pharmacy counter, was examined by AARP. The report’s summary notes, “94 percent of all Part D enrollees expected to reach the new$ 2, 000 out-of-pocket cap in 2025 will have lower total]i. e., premiums plus cost sharing ] out-of-pocket costs, averaging$ 2, 474 in savings” (emphasis mine ).
Notice the word I highlighted in bold. How many elders actually get paid for their drug prices through this out-of-pocket cover? The comments vary, but there’s a constant theme.
For example, an October 2021 investigation concluded that between 3.1 million and 3.5 million Medicare recipients would benefit from a$ 2, 000 seal on out-of-pocket drug prices.
A February 2024 study by the ( liberal ) Kaiser Family Foundation found that, in 2021, some 1.5 million beneficiaries would have benefited from a$ 2, 000 drug spending cap. Almost 6.8 million recipients have at least one season where their out-of-pocket drug charges exceed$ 2,000, meaning they may benefit from the IRA provision at some point in their lives since the Part D benefit’s first full season in 2007.
According to a simulation conducted by the Department of Health and Human Services ( HHS) under the incoming Biden administration in January 2025, 11.3 million Medicare beneficiaries are projected to be spending up to$ 2,000 this year. However, many ( 5.2 million ) of these beneficiaries are low-income individuals who already receive additional federal cost-sharing subsidies, the more relevant number of beneficiaries receiving the most assistance from the out-of-pocket cap is 6.1 million.
The options above all indicate that somewhere near a majority of recipients will see any discounts from the out-of-pocket cover, given that the HHS record notes 54 million total Part D enrollment. Instead, almost 90 percent of Medicare enrollees may pay higher prescribed medication premiums each year, based on the reliability of the above estimates, to allow a small group to profit.
Propaganda Campaign
On some degrees, that plan is justified. Seniors who frequently have celestial substance charges, often in the thousands of dollars, are those with high costs. Even though they differ on how to structure Part D in general and where to set that helmet, the majority of politicians and analysts, including this one, assistance some form of fatal spending cap.
However, AARP is simply flat-out penny for Joe Biden and his weak law by not attempting to provide a healthy discussion of costs and benefits. Consider the phrase” The current analysis found that 94 percent of the more than one million Part D enrollees who are projected to reach the new$ 2, 000 out-of-pocket spending cap will have lower total ( i .e., premiums plus cost sharing ) out-of-pocket costs in 2025.”
Even as it advertises the “94 percent” figure, the “more than one million” number means that, by AARP’s own analysis, more than 94 percent of beneficiaries ( i. e., roughly 52-53 million of the 54 million Part D enrollees ) will not benefit from the out-of-pocket cap. These people by definition will have higher out-of-pocket expenses because they will have to pay higher premiums to cover a devastating spending cover that they will not be able to accomplish. Claim almost all beneficiaries will benefit when almost none did. It’s a really Orwellian approach.
And AARP appears to be planning that strategy on the side of the road. The organization doubtless intends to distribute this ( mis-)information to its state affiliates in order to get local papers to publish the study promoting all the alleged benefits of Joe Biden’s law. The state-by-state breakdown of the supposed” share of Part D enrollees estimated to benefit” from the IRA is available.
Misleading Assertions
It gets better. The study claims that” the Congressional Budget Office estimates that, when fully implemented, the prescribed drug-related rules in the 2022 law]i. e., the IRA] may lower Part D enrollee and programme spending by billions of dollars. In reality, savings from lower prescription drug prices will be more than offset by the costs associated with increasing the generosity of Part D coverage. The AARP paper quotes a CBO presentation from February 2023, in which budget experts predicted a$ 17 billion decline in federal Part D spending in 2031 as evidence.
However, AARP does not mention any developments that came after that presentation, particularly a document that CBO released just last October. In that letter, CBO estimated that 1 ) higher-than-expected bids by insurers offering prescription drug coverage” will result in an increase in federal spending of$ 10 billion to$ 20 billion in calendar year 2025, compared with our earlier projections”, and 2 ) a “temporary” premium stabilization project ( read: bailout ) for Medicare Part D will cost$ 5 billion in 2025 alone, with its status in future years yet to be determined.
In other words, if the trends CBO outlined only a few months ago continue, much, if not all, of the IRA’s supposed long-term savings within Medicare Part D will evaporate. CBO hasn’t come out and said that outright, but it’s a clear possibility.
Did AARP make any of these new CBO predictions when gushing about the IRA’s alleged savings in its article? Not a chance. It did not respond to my repeated requests for comment as to why it omitted a significant, if eminently detrimental, development in the estimated cost of the IRA. AARP sure doesn’t want to be open about why it wouldn’t acknowledge recent concerns about the IRA’s fiscal effects for an organization that claims others should be more transparent in business dealings. Is it me the AARP is afraid of, the facts, or both?
Follow the Money
Why would AARP go to such obscene amounts of marketing to this Biden boondoggle? It has strong financial incentives to pursue this in addition to its generally leftist politics. As I’ve previously stated in these pages and in my work for American Commitment, AARP sells products from UnitedHealth Group, the largest insurance company in the country for billions of dollars. And insurers made out like bandits in the IRA — the new “negotiations” ( read: price controls ) on pharmaceuticals help pad their bottom lines, as does the extension of enhanced Obamacare subsidies in the law, paid for by raiding the Medicare program.
AARP always claims that policy, not politics, dictates its stances. But when the organization’s tax filing with the IRS admits that “gross revenue of AARP and its affiliates … are considered in employee compensation”, and royalties, primarily but not exclusively from United Health, constitute over 60 percent of the organization’s revenue — and growing — each and every AARP employee has thousands of reasons to toe the UnitedHealth line, in the form of their paychecks.
AARP can say whatever it wants, but it can’t make seniors paying higher premiums think they are “beneficiaries” of the IRA when they aren’t. And it can’t claim to be an “independent advocacy organization” when the bulk of its revenue comes from companies like United Health.
