Inflation at the root of Social Security, Medicare increases, according to SFA Economics professor
NACOGDOCHES, Texas (KTRE) - Social Security benefits are seeing a nearly 6% increase this year, the biggest increase in nearly four decades according to the Washington Post. The White House announced a 14.5% hike in Medicare Part B premiums late last year. Stephen Kosovich, Professor of Economics at Stephen F. Austin University, knows the reason why.
“Social security benefits are indexed off of the consumer price index, the CPI, and the short answer is the reason that the benefits were increased is because of inflation,” said Kosovich.
Kosovich says he estimates Medicare premiums will be roughly $170 a month for most people, but that it gets complicated because it is based on income. Premiums are set at their prices by law because they must cover a certain proportion of the cost. Kosovich also says as Social Security goes up because of inflation, the rise in premiums from Medicare costs will erode away some of the increases.
“There’s obviously COVID,” said Kosovich. “The big one that’s been making news too is this Alzheimer’s drug that is relatively expensive to administer, and that is at least a pretty big chunk of that increase.”
The drug in question is called Aduhelm from the company Biogen, and according to Reuters, it had its price reduced from $56,000 to just over $28,000 in December. Kosovich says drug prices as a whole are of public concern moving forward.
“I think people are concerned about prescription drug prices. I would also say that people should be on the lookout for an announcement from the Biden administration to see if there is any adjustment downward in these premiums.”
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