The Biden administration announced on Nov. 12 that it’s raising Medicare premiums, a move that it blamed in part on the cost of drugs.
The Medicare Part B standard monthly premium will rise by nearly $22 to $170.10 in 2022, according to the Centers for Medicare & Medicaid Services (CMS).
“The increase in the Part B premium for 2022 is continued evidence that rising drug costs threaten the affordability and sustainability of the Medicare program,” Chiquita Brooks-LaSure, administrator of the agency, said in a statement. “The Biden–Harris Administration is working to make drug prices more affordable and equitable for all Americans, and to advance drug pricing reform through competition, innovation, and transparency.”
The move also stemmed from the limiting of the monthly premium increase in 2021 in the Continuing Appropriations Act and from “spending trends driven by COVID-19,” according to the agency.
“It also reflects the need to maintain a contingency reserve for unanticipated increases in health care spending, particularly certain drug costs,” CMS said in a statement.
One drug, in particular, was a major factor. Officials said the uncertainty surrounding the potential use of the Alzheimer’s drug Aduhelm by people covered by Medicare meant that they needed to store away a higher level of reserves. In July, CMS began analyzing whether Medicare would cover the drug, but hasn’t finished the analysis.
In addition to the monthly premium, the annual deductible will rise to $233 from $203. Also, Medicare Part A inpatient deductibles will jump by $72 to $1,556 in 2022, and Medicare Part A daily coinsurance and skilled nursing facility coinsurance will both increase by at least $9.
Officials noted that many Americans covered by Medicare will see a net increase in Social Security benefits. The Social Security Administration announced in October that recipients will get a 5.9 percent increase in benefits.
However, the 14.5 percent increase in Medicare premiums—the highest since 2016—will eat up the entire adjustment for Social Security recipients with the lowest benefits, according to The Senior Citizens League, a nonpartisan seniors group.
“Social Security recipients with higher benefits should be able to cover the $21.60 per month increase, but they may not wind up with as much left over as they were counting on,” Mary Johnson, a policy analyst for the group, said in a statement.
Medicare is a federal health insurance program for Americans aged 65 and older. Americans can start receiving Social Security as early as age 62, although they receive more if they wait until full retirement age.