Biden Admin Big Pharma Health Matthew Cunningham-Cook The Lever

Biden Hikes Medicare Prices and Funnels Profits to Private Insurers

The largest-ever Medicare premium increase will pad the pockets of insurance executives who donated millions to the president’s election campaign.

By Matthew Cunningham-Cook / The Lever

(AP Photo/Susan Walsh)

Last week, the Biden administration quietly reaffirmed its decision to enact the highest Medicare premium hikes in history right before this year’s midterm elections. At the same time, President Joe Biden is endorsing a plan to funnel significantly more Medicare money to insurance companies and further privatize the government insurance program for older Americans and those with disabilities.

In effect, the higher premium increases will subsidize the larger payments to — and profits for — private insurance corporations. This comes after Biden raked in roughly $47 million from health care industry executives during his 2020 campaign.

The Biden administration announced on May 27 that due to “legal and operational hurdles,” Medicare recipients won’t see their premiums lowered this year, even though that rate was originally hiked last November in large part due to the projected costs of paying for a controversial Alzheimer’s drug that Medicare now says it generally will not cover.

The administration’s announcement comes as Biden officials move forward with a jolting 8.5 percent hike in payments made to private insurers operating Medicare Advantage plans next year.

The juxtaposition between dramatically increasing payments to private insurance plans that provide less care for higher costs on the one hand, and keeping seniors’ premiums artificially inflated on the other, underscores the Biden administration’s conflicting commitments when it comes to Medicare. On the 2020 campaign trail, Biden pledged as president to “…continue to defend our nation’s commitment to older Americans and people with disabilities through Medicare.”

But since taking office, Biden has expanded Medicare privatization by launching the involuntary ACO REACH program and through continuing to promote ever-increasing Medicare Advantage enrollment, and he has also raised premiums for Medicare recipients. The result, advocates say, is a situation in which Medicare’s sturdiness as an American institution is being steadily chipped away by well-connected corporate interests.

“[The] privatization effort is reaching a frantic state, and Medicare Advantage is going to fail,” said Bill Kadereit, president of the American Retirees Education Foundation, due to the fact that the plans must pay profits to investors, unlike traditional Medicare plans. “The industry is hoping to cover up that failure with taxpayer subsidies that none of the taxpayers understand.”

All Medicare recipients pay premiums for outpatient care, which is called Medicare Part B. That money can be funneled into traditional government Medicare plans, or into Medicare Advantage plans run by private insurers that are incentivized to limit the amount of care that elders receive.

The standard Part B premium for Medicare patients is now $170.10 per month — up 14.5 percent from last year, when it was $148.50. Half of the increase in premiums came from a single drug, Aduhelm, which, despite its June 2021 approval by the Food and Drug Administration (FDA) to treat Alzheimer’s disease, is not proven to do so.

The timeline of Biden’s Medicare moves, then, is this:

  • In June 2021, Biden’s FDA approved the drug Aduhelm for treatment of Alzheimer’s, despite controversy involving alleged scientific disputes inside the agency over the drug’s efficacy and industry pressure on the internal review process.
  • In November 2021, the Centers for Medicare and Medicaid Services (CMS), which administers and oversees Medicare, approved the historic 14.5 percent premium increase for all Medicare beneficiaries. The announcement noted that among other reasons, the hike “reflects the need to maintain a contingency reserve for unanticipated increases in health care spending, particularly certain drug costs,” and specifically mentioned covering Aduhelm.
  • A few days later, in response to questions from CNN, CMS revealed that the projected cost of Aduhelm was alone responsible for half of the premium increase.
  • The resulting outcry led Aduhelm’s manufacturer, Biogen, to halve the drug’s price the following month.
  • In January 2022, Health and Human Services Secretary Xavier Becerra called on CMS to reassess those premium hikes this year.
  • In April 2022, Medicare instituted strict rules regarding who could receive the Aduhelm under its plans — but kept the higher premiums in place.
  • Around this same time, CMS announced a massive 8.5 percent increase in the rates paid to for-profit Medicare Advantage plans — despite the official body overseeing Medicare payments, the Medicare Payment Advisory Commission, concluding that Medicare Advantage is more costly than traditional Medicare.
  • On May 27, the Biden administration announced that despite the extraordinary premium hikes that stemmed from inaccurate price assumptions, they would not be lowering the monthly premium deducted from social security checks, instead saying any overcharges will be factored into next year’s Medicare premium calculations.

The Biden administration’s decision to keep Medicare premiums artificially inflated won’t just constrain the budgets of cash-strapped seniors — it also appears to be a politically suicidal move in an already fraught election year.

So who benefits from the explosive rate increase? The major private insurance companies that helped bankroll Biden’s 2020 presidential campaign.

“Medicare Advantage insurers such as United Healthcare, Anthem, and CVS/Aetna are celebrating record profits in the tens of billions of dollars,” said Dr. Susan Rogers, president of Physicians for a National Healthcare Program. “Their business plan is simple: inflate their Medicare payments by making seniors look sicker than they are, and then pocket more of those Medicare dollars by ruthlessly denying seniors’ care.”

Meanwhile, more than 7 million seniors live in poverty and 7.3 million seniors are food insecure.

Matthew Cunningham-Cook

Researcher and writer focusing on capital markets, health care and retirement policy

32 comments

    1. Other countries are privatizing their healthcare services and have been for years. This is especially true in the UK, but also in France, Italy and Sweden.

  1. The main thing is to be defended from the enemies we insist on creating and spend as much as possible against the violence we delight in building up . In our always expensive and increasing weapon systems, our support for “democracies”like Saudi Arabia and Ukraine, our insistence on needling China and hating Russia we can manage to use plenty of our dollars to ensure that people,especially old/sick/handicapped are unable to live comfortably, but at least they can be content to help the profits of the pharmaceutical industry.

  2. Stay away from Medicare advantage imo.

    Traditional Medicare with Medigap policy.

    1. I have United Healthcare and it is not cheap. But it completely covered a recent hospital stay last year. I didn’t pay a dime. And ten years ago it completely covered my cataract surgery. Again, I didn’t pay a dime. Of course, healthcare should be free. But as long as I can scrape together those premiums, I will do so because I am not getting any younger. Is it a ripoff? Sure. Are the Democrats bought and paid for? Yes, indeed,.

      1. @B Caracciolo
        Show me one country where healthcare is free (Cuba?). The difference between this sh*thole and everywhere else is that in other countries, you pay taxes for your healthcare and the government becomes the “single payer” for your healthcare. Much cheaper that private insurance companies and everyone is covered, so win/win. My German friends told me that the tax is a deduction from their pay, and it’s not cheap. But it’s affordable, and in a decent country where you have a good social safety net, you don’t need to make a lot of money just to survive.

      2. Ok. And ‘affordable’, as we in this sh*t hole have learned…is relative.

  3. I have written our two US Senators and our US Representative and linked this informative article. The 20,000+ members of the Physicians for a National Healthcare Program – pnhp.org – advocate for single-payer medical coverage.

    Doctors and hospitals must maintain costly administrative staffs to deal with the bureaucracy. Combined, this needless administration consumes one-third (31 percent) of Americans’ health dollars. — Physicians for a National Health Program

    In contrast, Medicare administrative costs are less than 4 percent.

    — “We have 900 billing clerks at Duke (medical system, 900-bed hospital). I’m not sure we have a nurse per (each) bed, but we have a billing clerk per bed — it’s obscene.” — Dr. Uwe Reinhardt, hearing on health care reform, U.S. Senate Finance Committee, November 19, 2008

    1. Joan, I couldn’t have said it better. Now that same message needs to be sent to every politician in every level of government. I am sick and tired of the entire structure that runs this country.

      1. They are laughing all the way to the bank. Remember, there are 38, 000, 000 millionaires, and 3,700 billionaires. Those millionaires and multimillionaires like Pelosi or Biden, they actually despise humanity. They can’t talk straight to the real people — the 80 Percent who work, struggle, who have 8 percent of the “wealth” in USA, while the One Percent and their Eichmann’s have in the 19 Percent, they have the 92 percent of it all.

        I don’t know if you have talked with them, been with US Chamber of Commerce folk, or with capitalists who own apartments, housing, or with politicians, but their goal is accumulation of wealth and power for themselve, their masters and their perverse families.

        As Parenti stated a decade ago:

        The world’s 85 richest individuals possess as much wealth as the 3.5 billion souls who compose the poorer half of the world’s population, or so it was announced in a report by Oxfam International. The assertion sounds implausible to me. I think the 85 richest individuals, who together are worth many hundreds of billions of dollars, must have far more wealth than the poorest half of our global population.

        https://dandelionsalad.wordpress.com/2014/02/18/85-billionaires-and-the-better-half-by-michael-parenti/

        This is fact, and when you talk to Ivy Leaguers, to those vaunted mostly white elites, the chosen people, too, far outnumbering others in that elite class, they are truly despicable.

        And what is Hunter Biden’s great dirth of knowledge and skills to garner millions, and who knows how much from ZioLensky’s Ukraine? Coke, prostitutes, weakness, failure. But he’s a millionaire with a smile, too.

    2. Agreed. How anybody was fooled into voting for him is beyond my understanding. Lifelong war hawk, owned by the financial services and insurance conglomerates.

      1. I can think of at least 2 Marxist professors who wagged their fingers at me and insisted I vote for Biden. The excuse was “harm reduction,” or “breathing room,” or some other no sense. No surprise, but Biden is actually worse than Trump. What a surprise it must have been to them. Even Chomsky insisted on me and other leftists voting for Cracker Joe.

      2. To Tim,
        And it will be the same now – the LOTE (lesser of 2 evils) injunction, as it has been for decades – even though, as Glenn Ford said, the Ds are the more “effective” evil. The Rs are pretty open about what they want and will do, the D’s make promises about what we want to hear and then don’t do it, instead, essentially making league with the Rs – we keep being betrayed by the Ds, but we fall for it every time …. what the heck is wrong with us?

        The Ds have lied to us, but apparently have convinced us that TINA (there is no alternative) when there is and has been for some time, and that “3rd parties can’t win” – which is nonsense, any candidate can win if enough folks vote for ’em …

  4. Congress. Yes, we also expect Dems to resume dismantling the “safety net,” targeting Medicaid, maybe ending disability benefits.

  5. The Dems have been trying to bash Medicare for decades – Clinton was aiming at it, until Monica gate, when he figured he better lay off and not piss off his base. Obama had his “catfood commission” and gave us the miserable ACA, instead of M4A. Biden is furthering the move shoring up Med “Advantage” – the only ones getting the advantage are the insurance industries …
    When will folks catch on and realize that both D/Rs have Medicare and SS in their sights … and are aiming with assault weapons …

    1. “When will folks catch on and realize that both D/Rs . . . ” do not now and have not represented the majority of people in these Dis-United States for as long as I’ve been around. Yet, voters continue to vote for them as if .

  6. Oh, that Biden Build Backwards Better smile. The entire systems is based on prostitution:

    Biden received roughly $47 million from health care industry executives during his 2020 presidential campaign. The leadership of DCE contractor Clover Health donated $500,000 to the main super PAC for Senate Democrats in 2020, while Chamath Palihapitiya, the company’s financier, donated $750,000 to the same super PAC, according to the Open Secrets web site.

    Here, Wendell Potter, from his blog = https://tarbell.org/2022/05/the-potter-report-the-medicare-modernization-act/

    “Many people of course don’t have a clue that they might be able to get their medications at a lower price without using their insurance card, either through outfits like GoodRx or by using manufacturers’ coupons.

    And many of us, especially those of us dealing with cancer, MS, or other life-threatening chronic conditions, often have to spend thousands of dollars out of our own pockets before our coverage kicks in for even the drugs our insurance plans will cover. This is why so many of us with insurance get buried under mountains of debt and feel we have no alternative other than to beg for money on GoFundMe or file for bankruptcy.

    Back to that so-called Medicare Modernization Act of 2003. Not only did it make the Part D drug benefit nearly impossible to figure out because of the ever-changing list of medications insurance plans will or will not cover, but it also prohibited Medicare from negotiating with drug companies for lower prices as the Veterans Administration program can do.

    In Nation on the Take, the book I co-authored with Nick Penniman of Issue One, I cited the MMA as an example of how well-funded special interests are almost always able to call the shots in Washington. Here’s a paragraph from the book that provides a hint of how that industry-backed bill got across the finish line:

    When asked why he thought House leaders had scheduled the vote long after most Americans had gone to bed, Representative Dan Burton (R-IN), who voted against the bill, said: “A lot of shenanigans were going on that night (that) they didn’t want on national television.” Among the shenanigans, reportedly sanctioned by House leaders: freezing C-SPAN cameras and allowing lobbyists on the House floor as the vote was being taken.

  7. You’d think that anyone as decrepit as Joe Biden would know how it feels to be old.

    1. No, I wouldn’t think that. Being old for a wealthy poitician is easy street compared to what the rest of us ordinary old people have to put up with.

  8. Well, it is as some of us long thought: collusion is part of the two party process and Biden is a shill for all of most of our elected reps. He told us lies to get elected and then fell short of almost all his lying promises. No one who knew his history believed in him. It’s a grand show of lies to get elected and a disappointment afterwards, or so that has been my experience with 66 years of USA politics. That is all the two parties have ever delivered. We need more voices. The two parties know the rest of us are gonna wake up, sooner or later (and my fear is too late), so dems don’t do much about voting rights or anything else they promised or that matters to those who elected them. The young poet at the inauguration was used to their ends. Truth is, this is no longer a democracy and hasn’t been for some time, even back to genocide of indigenous and land owners who profited.

    1. To Paula.
      The ? is when are enough of us gonna wake up enough to “throw the bums out” – for me, that is by using the ballot box …

      1. You’re serious aren’t you? The ballot box? What is this…1920?

      2. To B,
        No it’s time to use the ballot box to throw the D/Rs out – up to now we have used it to elect D/Rs – first one, then the other, then back again – like ducks in a (increasingly) polluted pond with a set of hunters at either end each saying they will protect them from the other – so we swim to one end and get shot, then to the other -and get shot, then back again, over and over again for decades. And at the end of the day, the hunters put down their guns, and go out for a beer and – a duck dinner. Meanwhile there is a cleaner pond upstream with no hunters – but we have refused to swim there in sufficient numbers …

  9. The real war we are witnessing is the war against working class, weak and elderly. And dead are piling up into a mountain.

    Biden and his pro-oligarchic policies makes a flaccid clown of oligarchy like Trump look … presidential and stately.

    At least Trump uttered contemporary blasphemy of … critical need to talk with a President of nuclear superpower.

    Although none of them had any influence on Western Block MIC that is a part of global oligarchic clique that rules east and west currently engaged in fierce internal competition over control of nearly exhausted global human and material resources.

    If any war was ever real, it was continuing global class war; we, the peoples who work for living, versus them, the global oligarchic clique, their political sock puppets like Binet or Trump and IvyLeague monkey trained technocratic minions, the worst scam of humanity as they “scientifically” dehumanize almost entire planet making people into creatures of earth in need of control and occasional fratricidal culling via senseless wars like in Ukraine,Yemen Syria, Libya Iraq Afghanistan, Somalia, Vietnam, Korea and many more.

    I was shocked in 2020 about blindness of nominal leftist/socialist opposition and leftist media to reality that COVID hysteria was driven by nothing but another faction of global ruling clique so called global Medical-industrial Complex interests alone.

    It was not about a threat to health of people that was in fact catastrophically diminished not improved in last two years despite or because of absolutely fused political/medical dictate .

    In US no law was enabled or funded to make healthcare more accessible and affordable like Medicare for all or universal healthcare that would easily address all of the potential issues of all communicable diseases. Already appalling state of Health of US population became even more critical than before 2020.

    In fact what we are facing since 2020 is destruction of peoples global economy while giant global corporates were bailed out by Central Banks and unprecedented escalation of global class war against international workers’ movement amid deep existential crisis of capitalism that became militantly violent.

    In just two years prior to Covid phenomenon 1.8 million protests, strikes, blockades and others work or political actions were undertaken by workers worldwide. Two year since the number of protests worldwide dropped to near zero. Bizarre few led by supposedly revolutionary forces were even calling for self enslavement to oligarchic dictate that destroyed they livelihoods.

    Working class has been largely defeated via unprecedented psychological warfare of existential fear and globally coordinated propaganda operations meant at suppressing voices of sanity and reason sadly with active participation and autocratic political censorship of most of nominal socialist media that suddenly became allies supporters of devastating anti working class policies adopted by oligarchic elites especially governments, big tech and MedIC.

    Vast majority of Working people not only suffered because of huge damage to their health by deliberately collapsed economy, but by effectively crippling and dismantling operational capacities of healthcare systems worldwide that took toll of millions of dead already.

    But most importantly people lost trust and confidence in authority of corporatized medicine and honesty and dedication to Hippocratic oath among medical profession itself entangled in endless web of deep conflicts of financial interests. It is this reality that is currently gathering its deadly harvest.

    How doctors can be trusted while AMA violated their own ethical guidance that was adopted just after creation of Nuremberg Code 1947 a gold standard of post WWII medical ethics claiming that the code does not apply to current pandemic.

    Now hospitals clinics are empty, nurses and doctors are fired or quit on moral and ethical grounds while people are sick and dying as they know that what they find in doctors office is nothing but drug, vaxx, treatment or protocol pusher for big Pharma and MedIC with no regards to person’s individual healthcare needs.

    What Biden is doing to destroy Medicare is along lines of class war and class betrayal of his own working class heritage for a silver coin paid by elite country club he is married into.

  10. Yesterdays man strikes again! Helping Obama smash “hope and change” while glad handing with Delaware oligarchs as Obama sells out and crams wall street thieves in his white house!…………………Where is Bernie? Too bad he didn’t build an independent party 8 years ago!

    1. To Jim,
      When it was clear what the Dems were doing to Sanders, Stein invited him to join her in the GP – he never responded … He is a tried and true Dem – He may have an I on his cap, but he has a D on his shorts …

  11. In keeping with raids by the corporate state on public welfare coffers, Medicare and Medicaid were monstrously drained of funds for the fraud and financial coup of the plandemic’s unprecedented theft of the commons by ruling class elites.

    Promoting propaganda narratives as this piece does to focus attention on some side scandal of an Alzheimer’s drug, to the exclusion of any memory of such crimes against humanity as the virus crisis’ deliberate targeting of the elderly as an expendable population under medical martial law and prime lab rats for ‘vaccination’ with all its lethal and adverse effects, is more misdirection to keep us proles subject to further fascist set-ups.

    It also perpetuates the propaganda of identity politics and its perpetuation of self-interested politics so conducive to capitalist rule which divides the general population into demographic groups competing for pieces of the economic pie, rather than striking at the root of the system of class rule and its rigged strategy of targeting now this, then that group(s) to take to the cleaners and grave, while those out of the line of fire – this time – look the other way.

    An injury to one is an injury to all. Until we the people form organized mass movement to overthrow class rule, we will keep suffering these shifting assaults on all our lives. We are many, they are few. But the few are the many, unassailable in their power, when we march to their manufactured consent, and dissent, to have us internalize ruling ideology, to the loss of class consciousness of the perpetual war waged against us.

  12. Not only is Biden opposed to single-payer health care, he’s now proactively making it worse by doing this. The U.S. really sucks, that’s all I can say about this.

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