This historically high increase in Medicare's Part B monthly premium is "unsupportable" and should be lowered, given the dramatic price cut of the Alzheimer's drug Aduhelm, AARP says in a Jan. 25 letter to U.S. Department of Health and Human Services (HHS) Secretary Xavier Becerra.
Becerra this month ordered the Centers for Medicare and Medicaid Services (CMS), which is part of HHS, to reassess the Part B premium increase in light of the Aduhelm price drop. Medicare Part B covers doctor visits, diagnostic tests and other outpatient services.
The 2022 monthly premium was set at $170.10, up from $148.50 in 2021. That $21.60 hike was the largest dollar Part B basic premium increase in the health insurance program's history.
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Among the reasons CMS gave for the outsize increase was that it needed to set aside money in its reserves in the event it decides to cover Aduhelm, the new Alzheimer's drug approved in June by the U.S. Food and Drug Administration (FDA). At the time, Biogen, the manufacturer, estimated the drug's price would be $56,000 a year per patient. Since then, and after considerable pushback, Biogen cut its price estimate roughly in half, saying the drug would cost $28,200 annually effective Jan. 1. CMS has issued a proposal to cover Aduhelm on a limited basis for people enrolled in clinical trials. The agency is expected to make a final decision in April about covering the medication.
Becerra said in a one-paragraph statement Jan. 10 that with the 50 percent Aduhelm price drop, there is "a compelling basis" for CMS to reexamine its Part B premium increase.
"At a time when the typical Medicare beneficiary has an income of less than $30,00 per year, the standard Meidcare Part B monthly premium of $170.10 represents a substantial financial burden," Nancy LeaMond, AARP executive and chief advocacy and engagement officer, says in the letter to Becerra supporting his call for a reconsideration of the premium increase. "In light of Aduhelm's recent price reduction" and CMS' proposal for limited coverage of the new drug, "we strongly urge CMS to reasses the 2022 premium calculation and provide immediate relief to seniors who are paying higher premiums."
LeaMond also said that the impact one expensive drug had on the 2022 premium increase “"highlights how high prescription drug prices affect all Americans and underscores the need for comprehensive reform. Rather than give pharmaceutical companies a free pass to charge outrageous prices that lead to higher costs for everyone, policymakers must swiftly enact comprehensive prescription drug pricing reforms.”
CMS said the other factors that contributed to the large premium hike were rising prices to cover health care, some of which were attributed to the COVID-19 pandemic, and the action Congress took in 2021 to curb that year's Part B premium increase in the midst of the health emergency. In 2021, the Part B premium increased by only $3 a month, but Congress directed CMS to begin paying that reduced premium back, starting in 2022.
Through its Fair Rx Prices Now campaign, AARP has been fighting for lower prescription drug prices, urging federal and state elected officials to curb the runaway cost increases that millions of older Americans have faced for many years. Prescription drug prices have consistently increased well above the overall rate of inflation. AARP officials noted that the fact that a pharmaceutical company could cut the price of Aduhelm in half shows how arbitrary their pricing decisions are.
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.