Medicare Specialist Bluffton and Hilton Head Island
Inflation, Trump nor Biden are to blame for the Largest Medicare Part B premium in the program’s history.
Is Inflation to Blame for Medicare’s largest Part B premium increase in the medicare programs history? I think not. It’s true Medicare premiums have been growing steadily for decades to keep up with inflation and the rise in healthcare spending. When I started in the Medicare business as a career agent with Humana back in 2010, the inflation rate was 1.64% and the current inflation rate hit 8.5 percent in March, so perhaps your thinking Medicare had to raise the Part B premium almost 15 percent to adjust for rising inflation? After all inflation rose to over 6 percent back in October and it hasn’t look back. Turn on the news, and you’ll hear politicians like Sen. Rick Scott suggest that rising inflation is behind the largest Part B premium in medicare’s history. You’ll hear politicians like Sen. Scott say American’s Seniors are Paying the Price for Biden’s Inflation Crisis. You’ll hear the Senator lambasting Biden’s inaction to address the inflation crisis he and the Democrats have created with reckless spending and socialist policies, but folks turn the news off and keep your eye on the ball.
The reality is this: the main culprit for half the 2022 premium increase is an Alzheimer’s drug Medicare was ready to start covering called Adulhelm. This new drug was priced at $56,000 per year per patient. It’s estimated that Medicare spending on Adulhelm for one year alone would cost $29 billion, far exceeding the price of any other drug. Anyone working in the Medicare space knows inflation had nothing to do with the Medicare premium increases, because Medicare is practically shielded from inflation. Unlike groceries and gas, Medicare is not susceptible to inflation because the program sets prices for hospitals and doctors. The effect of recent inflation, SO FAR, on prices is ZERO. Why? Because Medicare controls prices through medicare assignment. Assignment means that your doctor, provider, or supplier agrees (or is required by law) to accept the Medicare-approved amount as full payment for covered services.
CMS cited the main factor that determined the 2022 increase in Part B premium spike was that they needed to raise money for a possible unprecedented surge in drug costs, predominately from the new alzheimer’s drug slated to hit the medicare market. Last Thursday, Medicare finalized its plans to restrict coverage for the controversial, pricey drug. The final decision puts new restrictions on the drug Adulhelm, which means less of a financial burden on Medicare. Last summer, doctors and scientists raised concerns over whether Aduhelm actually works and government watchdogs have investigated whether the FDA followed proper protocol to approve it and questioned its high price tag. Consequently, Biogen lowered the cost of the drug from $56,000 down to $28,000 overnight. Well wasn’t that nice of them. Great Scott! Biogen has a lot of wiggle room to play with, but that’s a story for another day.
Nevertheless, last week, Medicare restricted the drug’s use to only patents participating in clinical trials. The decision squashes the end of an intense offensive from drugmakers to force Medicare to pay for an unproven drug that was the real determinate in your 14.5 percent increase in your monthly Part B premium. Medicare’s narrow coverage policy regarding Adulhelm is huge blow to Biogen, which anticipated that access to the medicare market could rejuvenate the drugs unfruitful sales.
So before you sit down and listen to politicians ON BOTH SIDES launch an inaccurate self-serving harangue condemning Biden or Trump on failed economic policy, remember what Paul Harvey said, “And now, you know the rest of the story.” But this story is far from over. You heard it here first, I guarantee you that Health Secretary Xavier Becerra will make a statement, and in that statement he will reverse Medicare’s decision to raise premiums from $148 to $170.10 per month. By how much you ask? I’ve never been a very good gambler but if Vegas put a line on this, I’d say the over under is $10 dollars. Plan on seeing your Part B premium fall down to the 160 range sooner than later.
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