Ask the Advisor: March/April 2022

What Is The Status of Efforts To Reduce This Year’s Medicare Part B Premium?

Q:  Earlier this year I read that Medicare has been directed to reassess the 2022 Part B premium increase. Will this mean the Part B premium will be reduced?  When can we expect to learn anything if they do? 

A:  In January, the secretary of Health and Human Services, Xavier Becerra, gave instructions to the Centers for Medicare and Medicaid Services (CMS) to review the 2022 Part B premium.  About half of the record $21.60 per month basic premium increase was caused by the price of a single new Alzheimer’s drug, which has since been cut in half.  TSCL believes Medicare beneficiaries have grounds to ask for a refund on a portion of their 2022 Part B premiums.

The basic monthly Part B premium increased from $148.50 in 2021 to $170.10 in January of this year.  CMS blamed the big jump in part on the pricey new Alzheimer’s drug, Aduhelm.  Unlike prescription drugs which are covered by Part D, Aduhelm (which must be administered intravenously in a doctor’s office or outpatient clinic) is covered by Part B.  Since Part B premiums are automatically deducted from Social Security benefits, this drug is costing all program beneficiaries, even those who do not have Alzheimer’s.

Prior to the premium announcement last fall, the Medicare Trustees estimated in their annual report that the 2022 premium would increase from $148.50 to $158.50, but said their estimate did not include the potential costs of Aduhelm.  The Part B premium for 2022 was set in November of 2021 when Aduhelm was priced at $56,000 per patient.  But since then, Aduhelm manufacturer Biogen has cut the price by almost half, to $28,200.  However, the automatic deductions from Social Security benefits for Medicare Part B premiums — which have already started — were based on the cost when Aduhelm was $56,000.

In addition, the likelihood that many Medicare patients will be prescribed Aduhelm in 2022 is very low.  Medicare announced it is proposing to restrict coverage of the new drug to only “qualified” patients who are participating in approved clinical trials.  TSCL believes those trials are essential to demonstrate the safety and effectiveness of Aduhelm in treating Alzheimer’s.  Medicare beneficiaries and their families need to know whether the benefits of this drug out-weigh its significant side effects, which can include swelling and bleeding in the brain.

Those trials will take some time to set up, and Medicare will not even finalize its coverage determination for Aduhelm until April.  Thus, the number of patients who will actually have access to the drug appears to be quite limited for several years to come. This is why TSCL feels that the 2022 Part B premium was set too high, and that Medicare should lower the Part B premium, perhaps by as much $11.60 per month.

Reducing a premium after deductions have started would be something neither Medicare nor the Social Security Administration have ever done before, but it would be the right thing to do for older and disabled Medicare beneficiaries — especially now.  So far, nothing has been announced yet.  Secretary Becerra set no deadlines when he directed CMS to look into the problem.

TSCL, on the other hand, is urging the Administration and Congress to do everything possible to ensure that savings are passed along to Part B beneficiaries before the end of this year.  Keep watching TSCL’s Weekly Updates, for the latest on this issue.