Introducing Ask Phil – A Curated Guide to Your Benefit Questions

Since co-authoring the first “Get What’s Yours” book in 2015, I have spent nearly seven years fielding reader questions. That first book was about Social Security. It sold lots of copies and led me to become a contributor to a PBS web site overseen by one of my co-authors, Paul Solman, who has been an esteemed economics correspondent there for a long time – at least since the early days of movable type.

I introduced Ask Phil to PBS readers and, being PBS readers, they responded in force. For the next five years, I received thousands of questions from them and others who had read or learned about the that first book and a second about Medicare that followed in 2016.

I was not paid for these pieces but saw them as a way of repaying people for all the Get What’s Yours books they bought and, to knock my white hat askew if not off my balding head, to get exposure and sell even more books. In exchange for this largess, PBS approved my request to own the copyright to Ask Phil and its content.

I have continued to answer reader queries. Nothing reveals what you know and don’t know better than having to answer questions. It also reveals subjects that readers most often find important to them, or confusing, or both. And it helps keep me on my toes about changes to the rules and workings of the Social Security Administration and the Centers for Medicare & Medicaid Services, the division of the U.S. Department of Health & Human Services that oversees Medicare.

Fast forward to today.

I love books and collections of them in wonderful spaces we call libraries. Sadly, the Internet has made lots of non-fiction books obsolete, particularly non-historical books. I’m sensitve to this phenomenon because those are the kinds of books I have written. The aging of such books adversely affects me in two ways.

My most recent book was an explanation of U.S. health care. It was published a year ago but the manuscript was submitted more than half a year earlier, guaranteeing that the book was out of date before the ink on its pages had dried. Publishers hustle where they can to shorten print schedules but, as we’ve seen with today’s supply chain gridlocks, it can take a lot of time to get printed copies of books into thousands of bookstores and the warehouses of Amazon, Barnes & Noble, and other mass booksellers.

The second factor involves my Social Security and Medicare books. Now approaching their seventh and sixth birthdays, respectively, they are increasingly seen by even loyal fans of the books as being very long in the tooth. I know this because I get those emails, too!

In reality, both books remain largely accurate and (cue my bias) useful subject guides. To justify a new edition of a book, my agent and publisher tell me, at least 30 percent of its content must be new. There haven’t been enough changes in either Social Security or Medicare to come close to this threshold.

Sales of older current-affairs books dwindle, and that’s the case here, even though they remain relevant. To close the time gap, I use the Get What’s Yours website to publish significant rule changes for both programs, most notably each year’s new levels of Social Security benefit levels and various income qualification metrics, and Medicare premiums and user co-pays.

What to do?

Well, I have saved all those reader questions and answers. I reviewed them and came up with a master list of the important things that people asked me over and over again. I wound up with about 135 questions and issues. I combined earlier answers, rewrote them to make sense, and then updated them so that they reflect current Social Security and Medicare rules. Lastly, I inserted lots and lots of links to official program rules and explanations.

I’m making all of this material available today through the Ask Phil link that appears at the top of this page. Just scroll through the topics to find what you’re looking for.

Collectively, these items work like an ebook. With the Internet, however, I think I can do better. The ebook you see here is not a fixed object but will be updated as rules change so that what you read is always accurate when you read it. I call Ask Phil a curated archive. Thinking of it as a living ebook works, too.

I am making this content freely available to anyone who wants it. I’ve always been better at creating content than figuring out how to make money at it. I suppose some copycat gremlin could repurpose this archive and monetize it. But if you want to make sure this content is accurate, Ask Phil is the only place that can provide that assurance.

If you like what you see, tell your friends and colleagues. And, to my journalistic colleagues, I’d extend the offer to quote these materials and email me for any additions and clarifications.

Lastly, please hold me accountable. If you spot incomplete or inaccurate answers, I absolutely want to hear about it. Readers remain my best guide to relevancy and accuracy.

Thank you!

Aduhelm Preliminary Approval Only for Limited Use in Clinical Trials

The Centers for Medicare & Medicaid Services (CMS) said today (January 11) that it provisionally supports the limited use of Aduhelm, the controversial Alzheimer’s medicine, in clinical trials. The agency’s final decision is expected in April. The drug was approved last June by the U.S. Food & Drug Administration despite widespread concerns about its effectiveness.

Limiting the drug’s use will intensify pressure on CMS to reduce the large increases in the Part B premium for Medicare that it announced last fall. Aduhelm will be charged as a Part B medication because it must be infused in an office setting, unlike Part D drugs, which are self-administered by patients.

On November 12, Medicare cited potential Aduhelm spending as a major factor in its decision to raise the basic monthly Part B premium by $21.60, or nearly 15 percent, to $170.10 from $148.50 in 2021. The other causes were continued health-care price inflation and to make up for the government’s decision to minimize the 2021 premium increase to help people being battered by economic losses related to the pandemic.

As I wrote at the time, “(T)the sting of higher premiums will be reduced by next year’s Social Security cost of living adjustment (COLA) of 5.9 percent — the largest in 40 years. From where I sit, the COLA provided Medicare with the cover it needed to boost what amounts to a rainy-day reserve, not only for Aduhelm expenses but also broadly higher health care costs.”

On December 20, however, Biogen, the maker of Aduhelm, said it would cut its price in half to $28,000, triggering calls for a reduction in the Part B premium. Pressure increased earlier this week when Xavier Becerra, head of the U.S. Department of Health & Human Services, asked CMS to reassess amount of the Part B premium increase.

Why Can’t We Make Things Better in Health Care?

I have spent a lot of time around all sorts of insurance companies during the past 25 years, as an executive, entrepreneur, and contributing writer. In the health space, it is easy to hate insurance people. They receive our premium dollars, cover some of our health needs – often putting their commercial interests before those needs — and make lots and lots of money off of us.

A good case can be made that health care should be a public and not a private good. I respect that view but have never seen a well-conceived plan for how the U.S. can move from our private health insurance system to a European model where taxpayers fund a government-run health system.

Today, the odds of expecting such a plan from the bitterly divided Congress are zero. Huge compromises would be required. Further, it would take decades to effect any far-reaching transformation of health care. Such long-term planning is just not possible in Washington, and hasn’t been feasible for a long time.

Advocates of a true public health system seldom offer up approaches that explain how we’ll pay for such a system. As we’re learning, government deficits and inflation do matter. Steep cuts to defense spending are hardly a valid strategy. Big tax hikes on rich people and companies would amount to at best a down payment for a true public health system.

Plans also may include steep cuts in health prices, which admittedly are outrageous – roughly double per person here what they are in other so-called first world nations. But such plans don’t account for how private health companies would respond to price cuts, not to mention how nurses, doctors, and other front-line health professionals would react. They’re already part of the Great Resignation.

Medicare and Medicaid are certainly financed largely by the federal and state governments. But they also are largely run by private insurance companies. Why? There is no one-size fits all answer, but a major reason is that private companies manage health plans more efficiently and with better health results than do public plans.

The Veterans Administration is the closest thing the U.S. has to public health care. I think highly of the VA but its marks for customer service and health quality often fall far short of what we should expect from a public health system.

Meanwhile, health care businesses continue to feel the effects of the seemingly ingrained need in America to blame someone else whenever things go wrong.

When I see people bash health insurers, I’d like to ask them why they believe these private companies should operate with different goals than companies in other industries? Good luck trying to sell Wall Street on the need to accept lower health-care profit margins because they are in the public interest. By the way, the profit margins in Big Tech would be unthinkable in health care. But we love us our iPhones and there is no movement to shame Apple into lowering its profit margins.

So, we muddle on, unhappy and often unhealthy.


We Spent Nearly 10% More in 2020 for Less Health Care

The government’s comprehensive annual report on health spending last year has been released. It shows that spending rose by nearly 10 percent to more than $4.1 trillion, fueled by big increases in government COVID spending.

National health expenditures (NHE) rose from 17.6 percent to 19.7 percent of the gross domestic product, their largest one-year jump ever, according to the Centers for Medicare & Medicaid Services (CMS). In 2020, the U.S. gross domestic product was nearly $21 trillion.

Digging through the numbers, which many media outlets have done, it’s clear that traditional measures of health inflation cannot be applied to last year. Overall, Americans used less health care last year. The spending surge was driven by federal government programs for COVID prevention and treatment.

On the currently quaint premise that policy should be driven by facts, spending time with the NHE data is essential. As I have lamented before, the U.S. spends nearly twice as much on health care per person as other developed nations.

Polls regularly report that people think their care is pretty good, but the data say otherwise. Here’s a detailed look at how the health of Americans’ care compares with that provided elsewhere in the world. There are lots of reasons other than health spending for our health profile But there’s also no doubt that health spending here has been uncontrollable for a long time. We buy a lot of unneeded, low-quality care, and the people and companies that provide it make much more money than their non-U.S. peers.

Here are news stories on the NHE report from the New York Times, Wall Street Journal, Modern Healthcare, Axios, and Politico.

And here are two tables from the report that I have cited in prior-year NHE posts. The first shows the different types of care where health dollars are spent. The second shows how this care is paid for.

National health expenditures (NHE) by spending category
2018 2019 % 2020 %
NHE $3,604.50 $3,759.10 4.3 $4,124.00 9.7
 Health consumption expenditures 3,415.90 3,564.20 4.3 3,931.30 10.3
  Personal health care 3021.8 3,175.20 5.1 3,357.80 5.8
   Hospital care 1,122.60 1,193.70 6.3 1,270.10 6.4
   Professional services 978.90 1,022.40 4.4 1,069.30 4.6
    Physician and clinical services 736.9 767.9 4.2 809.5 5.4
    Other professional services 104.5 111.3 6.5 117.4 5.6
    Dental services 137.5 143.2 4.2 142.4 -0.6
   Other health, residential, and personal care 191 195.7 2.4 208.8 6.7
   Home health care 105.6 113 7.0 123.7 9.5
   Nursing care facilities and continuing care retirement communities 167.6 174.2 3.9 196.8 13.0
   Retail outlet sales of medical products 456 476.3 4.4 489.1 2.7
    Prescription drugs 324.2 338.1 4.3 348.4 3.0
    Durable medical equipment 54.5 57 4.9 54.9 -3.7
    Other nondurable medical products 77.5 81.1 4.7 85.7 5.7
  Government administration 46.3 47.4 2.3 48.4 2.1
  Net cost of health insurance 248.1 236.6 -4.6 301.4 27.4
  Government public health activities 99.7 105 5.3 223.7 113.1
 Investment 188.6 194.9 3.4 192.7 -1.2
  Noncommercial research 53.6 56.2 4.9 60.2 7.0
  Structures and equipment 135 138.7 2.7 132.5 -4.5



National health expenditures (NHE) by source of funds

Expenditure amount ($ billions) 2018 2019 % 2020 %
NHE $3,604.50            3,759                4.3            4,124                9.7
 Health consumption expenditures 3,415.90            3,564                4.3            3,931              10.3
  Out of pocket 386.5               404                4.4               389              (3.7)
  Health insurance 2,613.30            2,726                4.3            2,809                3.0
   Private health insurance 1,131.00            1,166                3.1            1,151              (1.2)
   Medicare 749.4               801                6.9               830                3.5
   Medicaid 596.4               614                3.0               671                9.2
    Federal 372.2               387                4.1               460              18.8
    State and local 224.2               227                1.3               211              (7.0)
   Other health insurance programs 136.5               145                6.2               157                8.4
  Other third-party payers and programs 316.3               329                4.1               510              54.8
   Other federal programs 12.8                 14                9.3               194         1,282.0
   Other third-party programs 303.5               315                3.9               316                0.2
  Public health activity 99.7               105                5.3               224            113.1
   Federal 12.1                 13              10.3               128            864.5
   State and local 87.7                 92                4.6                 96                4.2
  Investment 188.6               195                3.4               193              (1.2)


The big disconnect here is that U.S. health consumers pay only about 10 percent of personal health consumption out of their own pockets. The rest is paid by insurance premiums and government spending, which of course ultimately come out of taxpayer pockets as well.

Under the current system, true health costs are hidden from consumers, but we pay the bill in other ways. Wage levels are reduced so employers can fork over their share of premiums to private health insurers. Tax rates or, in recent years, government budget deficits, are raised to cover federal and state spending.


2022 Medicare Premiums Post Big Increases


Medicare announced on November 12 that it would apply big rate hikes on Medicare premiums next year. The monthly Part B premium will rise by $21.60, or nearly 15 percent, to $170.10 from $148.50 this year.

This increase is more than double the projected $10 boost included in the annual report from Medicare program trustees that was released in August. Half of the increase, Medicare officials reportedly said, is for contingency planning tied to the possibility of large claims by users of Biogen’s Alzheimer’s drug, Aduhelm. Because this drug must be administered by licensed caregivers, it would be covered under Part B of Medicare as an outpatient service, not by Part D prescription drug plans.

To date, very few people have been using the medication, and its formal approval as a covered drug is still under review by Medicare. Critics maintain the drug’s benefits are unproven and that its approval by the U.S. Food & Drug Administration was premature, at best.

The Centers for Medicare & Medicaid services (CMS) explained its reasoning as follows:

“Depending on utilization, the potential costs for this course of treatment range from negligible to very significant. To ensure that Part B is able to pay claims in full and on time, the Part B financing must be sufficient to provide for a realistic high-cost scenario of Aduhelm coverage. The contingency margin has been increased to accommodate this risk.”

On Dec. 20, Aduhelm’s manufacturer, Biogen, said it would halve the drug’s annual price to $28,000. CMS has made no announcement about whether it would reduce the 2022 Part B premium in response; many Medicare organizations have urged it to do so.

The sting of higher premiums will be reduced by next year’s Social Security cost of living adjustment (COLA) of 5.9 percent — the largest in 40 years. From where I sit, the COLA provided Medicare with the cover it needed to boost what amounts to a rainy-day reserve, not only for Aduhelm expenses but also broadly higher health care costs.

Higher health care expenses will also be reflected in high patient charges for Part A and in the high-income surcharges paid on Part B and Part D premiums.

Part A Deductible and Coinsurance Amounts
2021 2022
Inpatient hospital deductible $1,484 $1,556
Daily coinsurance for 61st-90th Day $371 $389
Daily coinsurance for lifetime reserve days $742 $778
Skilled Nursing Facility coinsurance $185.50 $194.50

Some people with insufficient Social Security work earnings must pay Part A premiums. “Individuals who had at least 30 quarters of coverage or were married to someone with at least 30 quarters of coverage may buy into Part A at a reduced monthly premium rate, which will be $274 in 2022, a $15 increase from 2021.” CMS said. “Certain uninsured aged individuals who have less than 30 quarters of coverage and certain individuals with disabilities who have exhausted other entitlement will pay the full premium, which will be $499 a month in 2022, a $28 increase from 2021.”

Medicare Part B Income-Related Monthly Adjustment Amounts

Beneficiaries who file individual tax returns with modified adjusted gross income: Beneficiaries who file joint tax returns with modified adjusted gross income: Income-related monthly adjustment amount Total monthly premium amount
Less than or equal to $91,000 Less than or equal to $182,000 $0.00 $170.10
Greater than $91,000 and less than or equal to $114,000 Greater than $182,000 and less than or equal to $228,000 68.00 238.10
Greater than $114,000 and less than or equal to $142,000 Greater than $228,000 and less than or equal to $284,000 170.10 340.20
Greater than $142,000 and less than or equal to $170,000 Greater than $284,000 and less than or equal to $340,000 272.20 442.30
Greater than $170,000 and less than $500,000 Greater than $340,000 and less than $750,000 374.20 544.30
Greater than or equal to $500,000 Greater than or equal to $750,000 408.20 578.30

Premiums for high-income beneficiaries who are married and lived with their spouse at any time during the taxable year, but file a separate return, are as follows:

Beneficiaries who are married and lived with their spouses at any time during the year, but who file separate tax returns from their spouses, with modified adjusted gross income: Income-related monthly adjustment amount Total monthly premium amount
Less than or equal to $91,000 $0.00 $170.10
Greater than $91,000 and less than $409,000 374.20 544.30
Greater than or equal to $409,000 408.20 578.30

Medicare Part D Income-Related Monthly Adjustment Amounts

Beneficiaries who file individual tax returns with modified adjusted gross income: Beneficiaries who file joint tax returns with modified adjusted gross income: Income-related monthly adjustment amount
Less than or equal to $91,000 Less than or equal to $182,000 $0.00
Greater than $91,000 and less than or equal to $114,000 Greater than $182,000 and less than or equal to $228,000 12.40
Greater than $114,000 and less than or equal to $142,000 Greater than $228,000 and less than or equal to $284,000 32.10
Greater than $142,000 and less than or equal to $170,000 Greater than $284,000 and less than or equal to $340,000 51.70
Greater than $170,000 and less than $500,000 Greater than $340,000 and less than $750,000 71.30
Greater than or equal to $500,000 Greater than or equal to $750,000 77.90

Premiums for high-income beneficiaries who are married and lived with their spouse at any time during the taxable year, but file a separate return, are as follows:

Beneficiaries who are married and lived with their spouses at any time during the year, but file separate tax returns from their spouses, with modified adjusted gross income: Income-related monthly adjustment amount
Less than or equal to $91,000 $0.00
Greater than $91,000 and less than $409,000 71.30
Greater than or equal to $409,000 77.90



Medicare Open Enrollment Rewards Homework, So Do It!

Welcome to my annual plea to spend time on Medicare’s annual enrollment process for next year. Beginning Oct. 15 and extending through Dec. 7, you can switch your current Medicare coverage, with no penalties, for plans taking effect on Jan. 1, 2022.

I wait each year to do this story until the Kaiser Family Foundation has released is initial assessments of next year’s private insurance plans for Medicare Advantage (MA) plans and stand-alone Part D plans.

Kaiser just released these reports and, as usual, they contain compelling reasons to shop around for better deals next year. Unfortunately, as Kaiser notes every year, very few Medicare beneficiaries do so, and many wind up paying more for less coverage.

Most experts lament how complicated Medicare private insurance plans have become. But the range of choices in passenger cars and trucks is even more daunting, and people manage to cope. I have not yet heard compelling reasons to return to the era of Model T Fords, yet many people believe reducing consumer Medicare choices would help consumers.

Perhaps, but sorting through the maze of available MA and Part D plans doesn’t have to be so complicated if people focused on their individual needs and not on the complexity of private offerings. This is what we do with vehicle purchases and we can do the same thing with Medicare.

Medicare Advantage

“Most Medicare Advantage plans (89 percent) include prescription drug coverage. Fifty-nine percent of these plans do not charge any additional premium beyond Medicare’s standard Part B premium,” the Kaiser MA report says. “More than 90 percent of non-group Medicare Advantage plans offer some vision, telehealth, hearing, or dental benefits.”

If you have an MA plan, make sure the doctors and other health professionals you use will still be “in network” next year. The easiest way to find out is to call their offices, not to wade through 30 or even more insurance-plan details.

Your next step is to focus on what the plans offer beyond the Part A (hospital) and Part B (doctors, outpatient, and medical equipment) coverage that Original Medicare and MA plans all must cover. More than 90 percent of MA plans provide vision, dental, hearing, fitness, and telehealth benefits. See which ones are important to you and make sure any MA plan you consider covers these items.

MA plans are touting their expanded non-medical coverage as well, but Kaiser notes that very fewer than 7 percent of standard MA plans have begun offering these benefits, which may include help paying for and delivering food and meals, pest control, transportation, and indoor air quality. MA Special Needs Plans (SNPs) that cover people with serious medical needs, including multiple chronic illnesses, cover between 8 and 20 percent of these items.

Part D Plans

It really pays to explore a new Part D plan.

“Nearly three-fourths, or 10 million, of the 13.3 million stand-alone drug plan enrollees who don’t qualify for low-income subsidies will have to pay higher premiums next year if they stick with their current plan,” Kaiser reports, “and many will also face higher deductibles and cost sharing for covered drugs.”

“The estimated average monthly premium for Medicare Part D stand-alone drug plans is projected to be $43 in 2022, based on current enrollment,” Kaiser added, “while average monthly premiums for the 16 national stand-alone drug plans available in 2022 are projected to range from $7 to $99.”

Shopping Tips

Your online Medicare account contains details of your current plans, including your prescription drugs. It is relatively easy to add or subtract drugs from these lists and to screen both MA and stand-alone Part D plans to make sure they cover your meds and how much you would pay for them next year. These out-of-pocket projections – NOT plan premiums – should guide your choice.

Medicare’s Plan Finder can help with your initial search, but you may need to visit individual insurance websites or, gulp, even call insurers to get missing details.

My current Part D plan sent me 2022 plan changes, which all Plans are required to do by the end of September each year, that showed it was going to quadruple my premiums next year. It took me no more than 10 minutes to find a much better deal that saves me money and covers all of my prescribed drugs.

Medicare Drug Pricing Deal is Both Modest and Momentous

Viewed through the Democrats’ political lens, the tentative Medicare drug pricing deal announced yesterday was a pale shadow of the tough price-cutting measure staked out by the progressive wing of the party. Viewed in terms of the changes its passage would trigger, it is a big deal.

A review of major news stories, which are excerpted below, produces the solid sense that while the full changes will take several years to enact, some changes will take effect almost immediately. Equally important, the knowledge that pricing rules will be changing will trigger different pricing approaches by drug companies that could reduce some prices in advance of the law’s formal timetable.

The major take-aways:

  • Seniors’ out-of-pocket drug prices eventually would be capped at $2,000 a year.
  • Insulin prices would be capped at $35 a month.
  • A small number of expensive drugs initially would be affected by the measure.
  • Private employer insurance plans would also share in price reductions.

The Associated Press

Democrats reached agreement Tuesday on plan to lower prescription drug costs for older people, capping out-of-pocket Medicare costs at $2,000 and reducing the price of insulin, salvaging a campaign promise as part of President Joe Biden’s $1.75 trillion domestic policy proposal.

Democrats later said insulin prices would fall from as high as $600 a dose to $35. The penalties on drug manufacturers for raising prices beyond the inflation rate will be retroactive to Oct. 1.


The details matter. And the details as they stand suggest drug companies would still retain the power to set prices, and most drugs wouldn’t be subject to government price negotiations.

The $2,000 out-of-pocket cap for Medicare patients is exactly what drug companies wanted and likely would lead to more drug sales since patients wouldn’t face prohibitively high costs at the pharmacy counter.

For patients that reach Medicare’s catastrophic drug coverage phase, insurers would shoulder 60 percent of the tab, while drug companies would cover just 20 percent.

The first federal negotiated drug prices wouldn’t go into effect until 2025 — plenty of time for lobbyists to further delay or kill the policy, and plenty of time “to adjust business models to negate meaningful impacts on earnings,” pharma analysts at Raymond James wrote Tuesday.

The New York Times

The prescription drug deal is limited. Starting in 2023, negotiations could begin on what Senator Ron Wyden of Oregon called the most expensive drugs — treatments for cancer and rheumatoid arthritis, as well as anticoagulants. Most drugs would still be granted patent exclusivity for nine years before negotiations could start, and more complex drugs, called biologics, would be protected for 12 years.

Stephen J. Ubl, the president and chief executive of the Pharmaceutical Research and Manufacturers of America, the industry’s main trade group, criticized the deal.

“While we’re pleased to see changes to Medicare that cap what seniors pay out of pocket for prescription drugs, the proposal lets insurers and middlemen like pharmacy benefit managers off the hook when it comes to lowering costs for patients at the pharmacy counter,” Mr. Ubl said. “It threatens innovation and makes a broken health care system even worse.”

Because Republicans are unanimously opposed to the bill, Democrats are pushing it through Congress using a fast-track process known as budget reconciliation that shields fiscal measures from a filibuster and allows them to pass on a simple majority vote. But given their slim margins of control, to win even a bare majority they must secure the support of all 50 of their senators and all but a few of their members in the House.

The final deal includes a $2,000 annual cap on out-of-pocket expenditures by older Americans facing catastrophic health issues, a strict $35 monthly cap on insulin expenses and automatic rebates on drugs whose prices rise faster than inflation.

The legislation would require substantial price reductions in drugs subject to negotiations, starting in 2025. And, they said, the rules curtailing ever-extending patent protections will be key to lowering costs.

The changes to the Medicare prescription drug benefit are likely to have big consumer impacts even sooner. Currently, there is no limit on how much patients can be asked to spend on their drugs, and many Medicare beneficiaries face bills of $15,000 or more each year if they take expensive medicines. In addition to setting an annual limit on out-of-pocket spending, the plan would smooth spending across the year, eliminating the so-called doughnut hole when many beneficiaries are responsible for their entire drug bill.


An outline of the most recent policy shared by the White House Tuesday night would empower Medicare to negotiate the cost for 10 of the most expensive drugs by 2025, and 20 drugs per year by 2028, while carving out exceptions for small biotech companies. Only drugs that have passed their initial exclusivity periods — 9 years on the market for some drugs and 12 for others — would be eligible for negotiation, and the government can use an excise tax to force pharmaceutical companies to the bargaining table.

But to the dismay of progressive lawmakers and outside advocates, the deal is likely to limit drug companies’ price hikes to the 2021 inflation rate, not the far lower 2016 rate they had initially supported. But those inflation caps would apply to people on private insurance plans as well as Medicare, and kick off at the beginning of next year.


The package’s path forward is unclear, but its inclusion at all is a coup for Democrats facing stiff opposition from the pharmaceutical industry. Just last week, President Biden announced the White House was abandoning the entire effort to lower drug prices because progressives and liberals were too far apart to cut a deal.

Winner: House Speaker Nancy Pelosi

Pelosi’s team has fought for Medicare to negotiate drug prices for more than 15 years, and if it becomes law, the policy will provide an opportunity for Democratic members to tout a major win on the campaign trail ahead of the 2022 midterm elections.

Winner: Employers 

Though there was tussling toward the end of negotiations, employers successfully fought to ensure drug makers would be penalized if they hike prices in the commercial insurance market. . . . Employers had been concerned that if drug makers got less money from Medicare, they’d jack up their prices elsewhere.

Winner: Seniors with high drug costs

These policies may not make a measurable difference for every consumer who takes prescription drugs, but it seems that it would help seniors who have high bills at the pharmacy counter.

Consumer groups including AARP, Families USA, and Patients for Affordable Drugs applauded the high-level agreement, though they said they are awaiting full details.

Loser: Drug makers

The creation of an infrastructure for Medicare negotiation is a big loss here. Drug makers had the chance to accept more incremental, bipartisan reform last Congress, but they stonewalled it. If this new Democratic deal becomes law, that tactic may have cost them, in hindsight. They will no doubt put up a fight as the deal moves forward through the legislative process, and if the changes make it to the regulatory process.

Loser: Pharmacy benefit managers

After skating by scot-free as negotiations progressed, the middlemen between insurance companies and drug makers will face more transparency requirements, according to a summary of the deal circulated by Peters’ team [Reps. Scott Peters (D-Calif.)].

The Wall Street Journal

Sen. Ron Wyden (D., Ore.), chairman of the Senate Finance Committee, said government price negotiations would begin with 10 drugs in 2023. Negotiations would start with the most expensive drugs, including treatments for cancer and arthritis, as well as anticoagulants, Mr. Wyden said.

The Washington Post

Democrats also plan to impose special, new caps on how much seniors would have to pay for insulin, which would be set at $35, seeking to help diabetes patients beset by sky-high price increases in recent years. Additionally, seniors who participate in the Medicare drug benefits plan known as Part D would see their yearly, out-of-pocket drug spending capped at $2,000, according to Wyden and other Democrats.

Social Security COLA Will Rise 5.9 Percent in 2022

The Social Security Administration announced today (October 13) that its annual Cost of Living Adjustment (COLA) will rise by 5.9 percent next year – the largest one-year boost since 1982. The increase will add $92 to the program’s average monthly benefit, which will rise to $1,657 from $1,565.

The increase was determined by the rise in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from the third quarter of 2021 to the third quarter of this year. Other important changes driven by the COLA include:

The ceiling on wages subject to Social Security payroll taxes will rise to $147,000 in 2022 from $142,800 this year.

Wage earners who have begun receiving Social Security but not yet reached their full retirement age (FRA) may earn $19,560 next year – up from $18,960 in 2021 — after which $1 in benefits will be deducted for each $2 earned in excess of that amount. The earnings limit for working beneficiaries who reach their FRA next year will be $51,960 – up from $50,520 this year – after which $1 in benefits will be deducted for each $3 in additional earnings.

A full list of new 2022 COLA-related adjustments may be found here.

Medicare will shortly announce the average Part B monthly premium for 2022. It was projected to rise by $10 — to $158.50 from $148.50 this year – in the recent annual report by Medicare program trustees. Part B premiums usually are deducted from Social Security benefits.

U.S. Drug Prices a Rip-Off, But . . .

As if we needed more evidence, here’s a recent analysis of how much Americans pay for big-ticket drugs and how much money pharmaceutical companies collect in the U.S. compared with their worldwide revenues for these drugs.

Manufacturer Drugs Revenues (billions) U.S Share of Total
U.S. Rest of World
AbbVie Humira
$20.4 $3.7 85
Bristol Myers Squibb Eliquis
$17.7 $10.5 63
Johnson & Johnson Imbruvica
$11.9 $6.0 66
Pfizer Eliquis
Prevnar 13
$10.3 $8.3 55
Roche Avastin
$9.0 $6.1 60
Merck & Co. Keytruda $8.4 $6.4 57
Gilead Sciences Biktarvy $6.1 $1.2 84
Regeneron Pharma. Eylea $4.9 $0.0 100
Amgen Enbrel $4.9 $0.1 97
Eli Lilly Trulicity $3.8 $1.2 76
Astellas Pharma Xtandi $2.2 $2.0 52
AstraZeneca Trulicity $1.6 $2.8 36
Bayer Eylea $0.0 $8.5 0

This graphic was drawn from a report issued by Public Citizen, the consumer advocacy group founded in 1971 by Ralph Nader.

“For 17 of the 20 top-selling drugs worldwide in 2020,” the report said, “pharmaceutical corporations made more money from U.S. sales than from sales to all other countries in the rest of the world combined.”

This situation has been largely caused by U.S. laws that prohibit Medicare – far and away the nation’s largest health care payer – from negotiating directly with drug companies over prices.

In other countries, by contrast, national governments do have that power.

It’s not clear (to me at least) the extent to which drug companies do not push back against foreign governments because they don’t have to so long as Uncle Sam shoulders the bulk of global drug revenues.

It’s also not clear to me how much industry revenues could drop before discouraging drug companies from spending the huge sums of money needed to develop the kinds of blockbuster drugs we want.

Wouldn’t it be nice to find out? Congressional approval for Medicare to negotiate drug prices would be a great place to start.

Here’s a Welcome, Fact-Based Guide to Successful Aging

In a world that often seems short on facts and distressingly long on opinions, there’s nothing to beat a solid report from the Society of Actuaries, a group dedicated to fact worshippers!

A recent report from the SOA Research Institute provides a solid foundation for many of the common-sense lifestyle behaviors that most of us know we should pursue to live longer and healthier lives. The title is hardly clickbait — Maximizing Health Span: A Literature Review on the Impact of a Healthy Lifestyle on Retirement. And nearly half of the document is devoted to 346 research references.

The report’s review yields a distilled ranking of the things most likely to either kill older people or, equally important, rob their later years of enjoyment due to disabilities and steep health costs. The expression of these behavioral liabilities is labelled “health span,” which is defined as the difference between your remaining life span and the number of those years you spend in good health.

The culprits here won’t surprise you. “For both the pre- and post-retirement age groups,” the report says, “the five risk factors with the largest impacts on long and healthy lives are tobacco use, high body-mass index, high fasting plasma glucose, dietary risks, and high blood pressure.”

Getting a health span grade of zero would be a good thing, of course. A more clinical expression of this goal, which I obsessed over in my Medicare book, is “compressed morbidity” – to me, at least, a morbidly appealing concept.

Getting to zero is, however, a difficult journey and requires navigating a world of multiple medical challenges and complex inter-relationships that create their own risks. Not to worry, the SOA researchers note, “the Global Burden of Disease (GBD) Studies from the Institute for Health Metrics and Evaluation (University of Washington) is a comprehensive model that organizes these complicated relationships.”

When the dust clears from all this fact-based number crunching, the report notes that “while life expectancy at age 65 in the United States has climbed to 19.6 years, healthy life expectancy lags at only 13.1 years, and adults at age 65 can expect to live only 6.47 additional years in good health, on average.”

Here are verbatim snippets from the report about the leading health challenges we face and the quality-of-life benefits from confronting them:

Tobacco Use

Smoking trends in the U.S. are encouraging – amongst U.S. individuals aged 65-69, daily smoking prevalence decreased from 13.7 percent in 2000 to 11.1 percent in 2015, mirroring the overall decline in smoking prevalence amongst the U.S. population. (Interestingly, dietary and smoking risks tend to improve with age, whilst the converse is seen with the other factors that shall be explored. Smoking cessation prior to age 40 leads to the greatest gains in life expectancy (individuals who quit smoking between ages 25 to 34 gain an average of 10 years relative to those who continue smoking); however, even as one approaches retirement age, individuals who stop smoking between ages 45 to 54 stand to gain 6 extra years of life relative to those who continue smoking.

Body Mass Index (BMI)

As of 2017-2018, approximately 42.4 percent of United States adults were obese, a figure that has seen startling increases from 30.5 percent since 1999-2000. The prevalence of obesity persists amongst older adults – amongst those aged 65 to 69, 33.9 percent were obese. This number has increased since 2000, when – according to GBD data, amongst U.S. adults aged 65 to 69 – 25.3 percent were obese. According to 2019 GBD data, almost 12 percent of deaths (a 22.9 percent increase since 1990) and 11.3 percent of years lived in disability (a 47.5 percent increase since 1990) amongst adults 70 years and older were attributable to high BMI.

Metabolic Risks (Fasting Plasma Glucose, Blood Pressure, Cholesterol)

Amongst U.S. adults 70 years and older, 39.5 percent of deaths (a 15.6 percent decrease since 1990) and 25.9 percent (a 15.9 percent increase since 1990) of years lived in disability were attributable to metabolic risks. (Geek alert!) This excess risk is measured against minimum exposure thresholds of 4.8-5.4 mmol/L for glucose, 110-115 mmHg for systolic blood pressure, and 0.7-1.3 mmol/L for LDL cholesterol.

Dietary Risks

Amongst U.S. adults 70 years and older, 14.8 percent of deaths (a 28.9 percent decrease since 1990) and 5.2 percent (an 18.4 percent increase since 1990) of years lived in disability were attributable to dietary risks.

With age, several associated nutritional changes may affect quality of life, which makes the provision of a healthy diet even more important. These include reduced thirst and decreased body water, which increase susceptibility to dehydration; age-related changes in nutrient needs, which can lead to vitamin deficiency or toxicity; changes in taste, vision and smell, which can lead to decreased enjoyment of food; broken bones; edentulous, or missing or false teeth, which can limit food choices; increased disease incidence, which can lead to changes in nutritional requirements; increased use of over-the-counter or prescription drugs, which can lead to changes in appetite, nutrient requirements and increases in possible drug-nutrient interactions.

Physical Activity

In older adults, physical activity is associated with improved performance of daily activities, prevention of falls, improved quality of life in those with arthritis, increased longevity, lower risk of cognitive decline, and an increased sense of purpose in life. Even light/mild activity has been shown to have positive effects on healthy aging in older adults.

Older adults should at least try to incorporate multicomponent physical activity that includes balance training as well as aerobic and muscle-strengthening activities. Most evidence supports a program of exercise with the following characteristics: three times per week of balance training and moderate-intensity muscle-strengthening activities for 30 minutes per session, with additional encouragement to participate in moderate-intensity walking activities two or more times per week for 30 minutes per session.

The report also includes other behaviors that can greatly effect longevity and successful aging. These include paying attention to health screenings and immunizations, social engagement activities, adequate sleep, vision and hearing care (to which I’d add dental care), continuing to look for and engage in purposeful pursuits, managing the six ADLs, or activities of daily living (mobility, eating, dressing, bathing, toileting, and continence), and successfully aging in place in a home with “age friendly” modifications to minimize falls and other senior unfriendly challenges.

There will NOT be a later quiz on these extensive data points. Or excessive rants to “do the right” things. The facts are, well, the facts. How you respond to them is your call.

In the meantime, please raise your glasses in a toast to compressed morbidity!