As Republicans make health care affordability a midterm issue, new scrutiny is falling on a senior Biden administration official who helped build a Medicare overhaul that was sold as a major money saver, but is now projected to increase federal deficits.
Kristi Martin, the former chief of staff at the Centers for Medicare and Medicaid Services (CMS), played a key role implementing the Inflation Reduction Act (IRA) and its Medicare Drug Price Negotiation Program. Before joining the Biden administration, Martin worked for organizations that had pushed aggressive government intervention in prescription drug pricing, and reportedly had a reputation for heavily favoring hospital and insurance interests.
The scrutiny comes after a July letter from the nonpartisan Congressional Budget Office (CBO) delivered a significant blow to the fiscal case Democrats made for the IRA.
When Democrats passed the law in 2022, the CBO projected that three major Medicare drug provisions — drug-price negotiations, inflation rebates and a redesign of Medicare Part D — would collectively reduce federal deficits by $129 billion through 2031.
Four years later, the CBO says that calculation has flipped.
“Evidence now indicates that the spending reductions attributable to drug price negotiation and inflation rebates have been smaller than CBO originally estimated,” the agency reported. Costs from the Part D redesign, meanwhile, have been “significantly larger.”
The CBO now projects the three provisions will increase federal deficits through 2031.
The reversal could give Republicans ammunition as they argue that government bureaucracy, insurers, and other middlemen are swallowing an increasing share of Americans’ health care dollars.
It also raises questions about the officials who designed the Biden program.
Martin previously served as vice president for health care at Arnold Ventures, where she led the organization’s prescription drug pricing portfolio. She also worked as managing director of the health practice at Waxman Strategies, founded by former Rep. Henry Waxman (D., Calif.), and served as a senior adviser in the Obama administration’s Office of Health Reform. Federal Election Commission (FEC) records show Martin contributed to Democratic candidates, including Joe Biden and Elizabeth Warren.
While at CMS, Martin helped oversee implementation of the IRA’s drug provisions and the construction of the bureaucracy responsible for administering them.
The program’s fiscal performance has fallen short of initial expectations.
The CBO originally assumed the first round of negotiations would produce average net price reductions of approximately 50 percent. Actual reductions were roughly 22 percent relative to 2023 net prices, prompting the agency to increase projected Medicare spending.
The larger problem has been Part D.
The CBO found that insurers’ 2026 bids reflected an approximately 35 percent increase in annual costs per enrollee, compared with the roughly 5 percent increase the agency had expected. The CBO concluded that the IRA’s Part D redesign was the “leading driver” of the unexpectedly high bids.
That record is now generating another question among some Republicans and health care policy analysts, several of whom raised questions to the Washington Reporter. At the forefront of the unanswered questions is why is CMS under President Donald Trump continuing a system created under Biden? While Martin left CMS before President Trump took office, the system she designed and the team she worked with to enact it have remained completely intact.
Republican health policy sources who spoke with the Reporter questioned why an administration that has aggressively dismantled Biden policies elsewhere is maintaining the basic framework Martin helped establish, even as we see it fail on such a massive scale.
“It’s strange to see officials within President Trump’s CMS effectively maintaining a Biden program, designed by Biden officials, and still being run by many of the same leftover Biden bureaucrats,” one Republican source familiar with the issue told the Reporter.
The criticism comes as officials within President Trump’s CMS are doing more than simply finishing negotiations inherited from Biden. In June, CMS proposed establishing a “permanent framework” for the Medicare Drug Price Negotiation Program beginning with drugs whose negotiated prices take effect in 2029. CMS Administrator, Dr. Mehmet Oz, said the administration was moving from annual updates to a “permanent, predictable framework.”
CMS followed that action in July with additional guidance for implementing negotiated prices in 2028.
The Trump administration has also expanded the program into its third negotiation cycle, selecting 15 additional drugs, including Medicare Part B drugs for the first time, for negotiations occurring this year.
Personnel continuity is also drawing attention.Daniel Heider was named Director of CMS in June 2023 under the Biden administration, after donating to the Biden presidential campaign in 2020; he also donated to as well as contributions to 2020 Democratic Senate candidates including Sara Gideon, Theresa Greenfield, Steve Bullock, and Barbara Bollier, all of whom were defeated by Republicans
Another Biden connection is Lara Strawbridge, who was named Acting Director of the Medicare Drug Rebate and Negotiations Group at the Center For Medicare & Medicaid Services under the Biden administration; she has previous ties to nonprofits connected to the Arabella Advisors network, and she also contributed to Kamala Harris’s failed presidential campaign.
Heider and Strawbridge were both reportedly in the room when the program in question was developed, sources told the Reporter.
Another health care source said the continued presence of officials involved in Biden-era implementation with such obvious partisan leanings makes the administration’s embrace of the program particularly difficult to reconcile with Republican attacks on the IRA.
“If Republicans are going to run on cleaning up the health care mess Biden left behind, they can’t keep Biden’s system on autopilot,” the source said. “You can’t argue that these policies failed seniors and taxpayers and then leave the same structure and the same people in charge of carrying them out.”
