Possible reduction in Medicare Part B premiums still in play

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For Medicare beneficiaries wondering if Part B premiums can be reduced, the wait continues.

More than three months after Health and Human Services Secretary Xavier Becerra ordered a reassessment of this year’s standard monthly premium of $170.10 (a bigger jump from $148.50 in 2021), there is still uncertainty about when a decision will be made , and whether it will affect the beneficiary’s payment this year.

Tricia Newman, executive director of the Kaiser Family Foundation’s Medicare Policy Program, said: “A midway drop in premiums would be unprecedented.”

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A spokesman for the Centers for Medicare and Medicaid Services said the agency will continue to review premiums and will release more information as it becomes available.

About half of the larger-than-expected 2022 premium increase set last fall was attributable to the potential cost of paying for Aduhelm – a drug to fight Alzheimer’s disease – although actuaries don’t yet know the details of how to cover it because medical care Insurance officials are still determining.

By law, CMS is required to set the annual Part B premium at 25% of the estimated cost that part of the plan will incur. Therefore, in its calculations for 2022, the agency must consider the possibility of extensive coverage of Aduhelm.

Of course, the reason to increase that high is gone.

Paul Ginsburg

Nonresident Senior Fellow of the Brookings Institution

However, things have changed.

A few weeks ago, CMS officials announced that the program would only serve beneficiaries who received Aduhelm as part of a clinical trial. In addition, the price tag per patient used by actuaries in calculations last year was slashed by manufacturer Biogen in half, from $56,000 to $28,000 a year, effective Jan. 1.

“Certainly, the justification for an increase that high is gone,” said Paul Ginsburg, a nonresident senior fellow at the Brookings Institution and an expert on health care policy. “The question is what is administratively feasible.”

It is also possible that if premiums are reduced, it will apply to 2023 instead of 2022. Part B premiums have declined year over year for a variety of reasons in the past, including legislative changes to how premiums are calculated.

“If I were to manage this, I would worry about the precedent for making a change midyear,” Ginsburg said.

It’s also possible that Aduhelm’s lower-than-expected spending was at least partially offset by higher costs in other areas of Part B coverage, which include ambulatory care and medical devices. While Medicare Part D provides prescription drug coverage, some drugs are administered in a doctor’s office—such as intravenous Aduhelm—and are therefore covered in Part B.

“Even if fewer people use Aduhelm than initially anticipated and the price is lower than assumed, actuaries may be inclined to consider other changes that might moderate this amount,” Newman said.

About 6 million Americans suffer from Alzheimer’s, a degenerative neurological disease that slowly destroys memory and thinking, and has no known cure. It can also destroy the lives of family and friends of people with the disease.

Most of these patients are 65 years of age or older and are typically covered by Medicare, which covers more than 63 million people. In 2017, about 2 million beneficiaries used one or more of the then-available Alzheimer’s treatments covered by Part D, according to the Kaiser Family Foundation.

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