Government may scale back Medicare Part B premium increase

Personal Finance

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There’s a chance that your Medicare Part B premiums for 2022 could be reduced.

Health and Human Services Secretary Xavier Becerra on Monday announced that he is instructing the Centers for Medicare & Medicaid Services to reassess this year’s standard premium, which jumped to $170.10 from $148.50 in 2021.

About half of the larger-than-expected increase was attributed to the potential cost of covering Aduhelm — a drug that battles Alzheimer’s disease — despite not knowing yet to what extent the program would cover it. Either way, the manufacturer has since cut in half its estimated per-patient price tag to $28,000 annually from $56,000 — meaning Medicare’s cost estimate was based on now-dated information.

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“With the 50% price drop of Aduhelm on Jan. 1, there is a compelling basis for CMS to reexamine the previous recommendation,” Becerra said.

A CMS spokesperson said the agency is “reviewing the secretary’s statement to determine next steps.”

Aduhelm was approved by the Food and Drug Administration in June. The approval for the drug, manufactured by Biogen, came despite some objections in the scientific community about its effectiveness and side effects, which include brain swelling and bleeding. 

Medicare officials are expected this week to release a preliminary decision on coverage — i.e., whether it will cover Aduhelm at all or limit its use to certain patients under certain conditions. A final decision should come in the spring.

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

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

While Medicare Part D provides prescription drug coverage, some medicines are administered in a doctor’s office — as with Aduhelm, which is delivered intravenously — and therefore covered under Part B.

By law, CMS is required to set each year’s Part B premium at 25% of the estimated costs that will be incurred by that part of the program. So in its calculation for 2022, the agency had to account for the possibility of covering Aduhelm.

Making a retroactive change to Part B premiums would make sense, experts said.

“It would be unprecedented, but in this situation it may not be unwarranted,” said Juliette Cubanski, deputy director of the program on Medicare policy at the Kaiser Family Foundation.

“If it turns out that spending on this drug is going to be significantly less than what Medicare’s actuaries expected … it would be reasonable to make an adjustment to the Part B premium,” Cubanski said.

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