Medicare’s Part D Scam: Lowball the Costs, Then Stick Taxpayers with the Bill

Washington’s favorite con for expanding entitlements is deliberately lowballing the price tag, selling the “savings,” then watching the real costs explode and forcing the public to cover the difference.

The Inflation Reduction Act’s Medicare Part D redesign capped seniors’ annual out-of-pocket drug spending shifted more liability onto plans and taxpayers and overhauled the benefit structure. The Congressional Budget Office (CBO) originally scored those drug provisions as a modest cost or even a net saver—claiming roughly $129 billion in deficit reduction. Reality arrived with a vengeance. CBO has since jacked its Part D projections by roughly $600–700 billion over the coming decade. Per-beneficiary spending is racing past $4,000, plan bids have soared, and the promised “savings” have evaporated into higher taxpayer subsidies. No forecasting error, this is the standard operating procedure for growing the welfare state.

In private industry, if a project comes in far over the approved budget, management does not simply shrug and keep spending. The overruns force a hard stop: redesign the program, cut elsewhere, or get new authorization. Congress should impose the same discipline. When official scores understate the true cost of an entitlement expansion, the law should not automatically continue at the higher price. It must be redesigned or re-budgeted. Knowing that ballooning costs will trigger automatic accountability—and that popular benefits could be curtailed—would make the people who write and score these bills far more careful. Temporary premium subsidies layered on top merely delayed the reckoning and hid the damage from voters.

Entitlements sold on fantasy numbers are theft dressed up as policy. The only way to demand realistic accounting is to make the overruns blow back on the very people who produced the bad numbers in the first place.