A few weeks ago, Medicare announced the new Part B premiums for 2022. While the Centers for Medicare and Medicaid Services (CMS) had projected a rise in premiums of 6.7% earlier in 2021, the actual increase in Part B premiums for 2022 is 14.5%, the largest increase ever seen. The huge increase is partly based on the potential cost of covering Aduhelm, a new drug to treat Alzheimer’s disease.
This massive increase will take premiums for beneficiaries in the lowest income bracket from $148.50 a month to $170.10 a month, which could be difficult for many Medicare beneficiaries living on a fixed income to afford. But now there is a chance that Medicare Part B premiums might be reduced.
The Reason For The $21.60 Hike
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. One of the main reasons CMS gave for the large spike in Medicare Part B premiums for 2022 was that it needed to set aside money to cover Adulhem, the new Alzheimer’s drug that has recently been approved by the FDA. It was estimated that the drug would cost $56,000 a year.
Now the medication’s manufacturer, Biogen, has estimated that the drug will actually cost $28,200 a year. Because of this projected change in price, the Department of Health and Human Services is asking for a re-assessment of Medicare Part B premiums.
The Push To Reduce Premiums
Department of Health and Human Services Secretary Xavier Becerra has ordered the Centers for Medicare & Medicaid Services to reassess this year’s standard premium. “With the 50% price drop of Aduhelm on Jan. 1, there is a compelling basis for CMS to reexamine the previous recommendation,” Becerra said.
Other organizations are also calling for a reduction in Part B premiums. “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,” said Nancy LeaMond, AARP executive vice president and chief advocacy and engagement officer. “Now that the drugmaker has cut the price in half, the Medicare Part B premium increase should be lowered as well.
“This also highlights the importance of giving Medicare the authority to negotiate drug prices. Without it, we’ll keep seeing sky-high drug prices leading to premium hikes and higher out-of-pocket expenses for older Americans.”
A CMS spokesperson said the agency is “reviewing the secretary’s statement to determine next steps.”
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