We love saying we told you so.

CTUP senior fellow and University of Chicago economics professor Casey Mulligan and his colleague Tomas Philipson said two years ago that the IRA’s insurance price controls and “redesign” measures would make it impossible for insurers to finance the previous level of benefits for the 2025 plan year (signups begin this September):

President Biden has accused Republicans of scheming to cut Medicare. In fact it is his signature legislation, the Inflation Reduction Act, that will lead to benefit cuts and premium increases for seniors. Medicare’s popular drug-coverage program is headed for a painful amputation.

The Brookings Institution claimed that there was nothing to see: “The Inflation Reduction Act won’t force [Medicare drug] plans to cut benefits or exit the market” and that the professors suffered from “a misunderstanding of what the law does.”

But here we are.

The Biden administration just warned that Medicare’s drug program is suddenly under severe financial stress, with insurers to exit the market and seniors to lose coverage unless insurers are bailed out tens of billions of dollars. The “root cause” is the IRA.

Mulligan and Philipson got it exactly right, and now the Biden administration is scrambling to push the bad news past the election with a last-ditch regulatory bailout. Tuesday’s Wall Street Journal gives the latest:

CMS usually announces preliminary Part D premiums in July. Not this year. Instead, CMS unveiled a “demonstration project” that would impose “a year-over-year increase limit of $35” for premiums while boosting payments to insurers…

The gambit backfired as insurers are raising premiums. CMS’s intervention is another example of how the IRA will cost far more than Democrats claimed. Nobody knows how much more since CMS isn’t doing a normal rule-making that requires a cost analysis.