Biden Administration Urged by Democrats to Lower Medicare Premium Hike

Democratic lawmakers urged the Biden administration to lower the Medicare premium hike expected to go into effect soon.

Medicare announced last month that it would increase its monthly premium for outpatient care for "Part B" from $148.50 to $170.10, almost $22, beginning in January.

"Rather than assessing the current $21.60 per month ... premium increase in full, I urge you to reduce the amount," Senate Finance Chairman Ron Wyden, D-Oregon, wrote health secretary Xavier Becerra. "Taking this type of approach would reduce near-term expenses for seniors on fixed incomes." The Associated Press received a copy of the letter Monday.

Wyden wrote Becerra, as secretary of Health and Human Services, is given "broad authority" to decide the "appropriate contingency margin" used in making premiums.

No immediate response was given from the administration.

Part of the increase, around $11 a month, is because the agency needs a contingency fund to cover Aduhelm, a new $56,000 Alzheimer's drug from Biogen. Most Medicare enrollees will see the premium taken from their Social Security checks. This could take a major part of seniors' 5.8 percent cost-of-living increase.

Typically, the financial effect of costly drugs falls mostly on patients with serious diseases, like cancer, rheumatoid arthritis, or multiple sclerosis. With Aduhelm, however, the financial impact would be spread throughout not just Alzheimer's patients who need the drug, but also general Medicare enrollees.

Medicare has not yet finished creating a formal policy for Aduhelm, thus Wyden said there is a clear reason to collect less up front at this moment.

"It is possible that any near-term Medicare coverage for Aduhelm ... could have a limited and narrow scope," he wrote. What could be driving a majority of the decision in setting the new premium is "uncertainty" regarding the drug's financial effect on Medicare, Wyden said.

Soon after Medicare announced the increase last month, Vermont Independent Senator Bernie Sanders called on the administration to roll it back. Wyden also said he had concerns and was exploring options. And last week Democratic Senators Maggie Hassan of New Hampshire, Jacky Rosen of Nevada, Chris Van Hollen of Maryland, Mark Kelly of Arizona, and Jack Reed of Rhode Island wrote President Joe Biden that "we must address this issue as quickly as possible."

Some groups representing older people are anticipating a backlash from Medicare recipients if nothing is done.

"Once the Part B premium for 2022 starts getting deducted from their Social Security benefits, I think Congress is really going to be in for it," said analyst Mary Johnson of the nonpartisan Senior Citizens League, which advocates to preserve benefits for retirees.

The Labor Department reported Friday that consumer prices jumped 6.8% over the past year, the biggest inflation increase in nearly four decades. Prices for basic necessities from food, to energy costs, to housing were at the root. Inflation worries are adding to the political uncertainty for Democrats heading into the 2022 midterm elections.

Biden's social agenda legislation would take significant action to lower drug costs for Medicare recipients. But even if the bill is approved, Medicare would have to wait years to negotiate over the price of new drugs like Aduhelm. Other provisions that would reduce costs more immediately don't take effect for a couple of years. The Medicare premium increase would hit first.

Older people "feel that younger working families have received most of the benefits of recent legislation and would continue to do so under the Build Back Better Act," said Johnson, the advocacy group analyst.

The issue has turned into a case study of how one pricey medication can swing the needle on government spending and impact household budgets. People who don't have Alzheimer's would not be shielded from the cost of Aduhelm, since it's big enough to affect their premiums.

Alzheimer's is a progressive neurological disease with no known cure, affecting about 6 million Americans, the vast majority old enough to qualify for Medicare.

Aduhelm is the first Alzheimer's medication in nearly 20 years. It doesn't cure the life-sapping condition, but the Food and Drug Administration determined that its ability to reduce clumps of plaque in the brain is likely to slow dementia. However, many experts say that benefit has not been clearly demonstrated.

Medicare is currently covering Aduhelm on a case-by-case basis, pending a formal evaluation that could take months.

The Associated Press contributed to this report.