Medicare's Part B $170.10 basic monthly premium will not be reduced this year, but instead any savings from lower spending will be passed on to beneficiaries in 2023.
U.S. Health and Human Services Secretary Xavier Becerra had ordered the Centers for Medicare and Medicaid Services (CMS) to reassess its record-high premium increase in 2022 for Part B, which covers doctor visits, diagnostic tests and other outpatient services. The $21.60 basic premium hike in 2022 was the largest dollar increase in the health insurance program’s history.
Among the reasons CMS gave for the outsize increase was that it needed to set aside money in its reserves in the event it decided to cover Aduhelm, the new Alzheimer’s drug approved in June by the U.S. Food the Drug Administration (FDA). At the time, Biogen, the medication’s manufacturer, estimated the drug’s price would be $56,000 a year. After considerable pushback, Biogen cut its price estimate roughly in half, saying the drug would cost $28,200 annually effective Jan. 1, 2022. Also, since the premium increase was announced, CMS decided that Medicare coverage of Aduhelm will be limited to beneficiaries enrolled in approved clinical trials.
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AARP has urged CMS to lower this year’s premium. “It is unconscionable for a single outrageously priced drug to drive up premiums for all Medicare beneficiaries — many of whom are already struggling to make ends meet,” Nancy LeaMond, AARP executive vice president and chief advocacy and engagement officer, said in asking for a reassessment of the $170.10 premium. “Now that the drug maker has cut the price in half, the Medicare Part B premium increase should be lowered as well.”
CMS officials say that reflecting the savings in what Medicare will likely have to spend on those beneficiaries who will be eligible for Aduhelm “in the calculation of the 2023 Medicare Part B premium is the most effective way to deliver these savings back to people with Medicare Part B.” CMS is expected to announce the 2023 Part B premium in the fall.
In their report, CMS officials say they determined that “a mid-year administrative premium redetermination to not be operationally feasible” and that the agency has never changed the premium in the middle of the year. CMS notes that it wouldn’t have the authority to send premium refunds to all Part B enrollees. The report also says that absent the effects of covering Aduhelm, the basic 2022 Part B monthly premium would have been $160.30. The 2021 Part B premium was $148.50.
“After receiving CMS's report reevaluating the 2022 Medicare Part B premiums, we have determined that we can put cost-savings directly back into the pockets of people enrolled in Medicare in 2023,” Becerra said in a statement. “We had hoped to achieve this sooner, but CMS explains that the options to accomplish this would not be feasible."
Editor's note: This story has been updated with new information.
Dena Bunis covers Medicare, health care, health policy and Congress. She also writes the “Medicare Made Easy” column for the AARP Bulletin. An award-winning journalist, Bunis spent decades working for metropolitan daily newspapers, including as Washington bureau chief for the Orange County Register and as a health policy and workplace writer for Newsday.