Categorized | Pushback, Your Money

Forget Any Changes To Medicare Part B Premium Rates

FDA, Aduhelm, Part B

About three months ago, I reported that people on Medicare were being over-charged for their Part B (doctor’s care) premium rates because of the inflated cost of a new drug to treat Alzheimer’s disease.

By Al Norman

About three months ago, I reported that people on Medicare were being over-charged for their Part B (doctor’s care) premium rates because of the inflated cost of a new drug to treat Alzheimer’s disease. I suggested that Medicare should lower the Part B monthly premium because of this mistake. If you were hoping for a refund soon, nothing is coming around the bend.

In November of 2021, the Center for Medicare and Medicaid Services (CMS) announced that the Medicare Part B premium rates for 2022 would rise from $148.50 per month in 2021, to $170.10 in 2022 — a 14.5 percent premium hike — costing beneficiaries $21.60 more per month. This Medicare B premium hike was the largest Part B premium increase in the 57-year history of the Medicare program.

This historic increase in the Medicare B premium was caused, in part, by the controversial action of another Federal Agency: the Food & Drug Administration (FDA). In June, 2021, the FDA granted “accelerated approval” for a new Alzheimer’s disease drug called Aduhelm, manufactured by the Biogen company.

patient-centered, Social Security, ageist, nursing, COVID, Trump, vaccineThe FDA’s Advisory Committee had recommended that the FDA not approve the new drug, after studies failed to show strong evidence of the drug’s effectiveness. Biogen announced that Aduhelm would carry a list price of $56,000 a year. CMS then explained to seniors that “we must plan for the possibility of coverage for this high-cost Alzheimer’s drug which could, if covered, result in significantly higher expenditures for the Medicare program.”

But members of Congress began complaining that “Medicare beneficiaries cannot afford to be saddled with a record increase in monthly premium costs — especially when those premium costs are being driven up by uncertain expectations of sky-high Medicare costs for an outrageously expensive drug like Aduhelm that has presented limited clinical evidence of its effectiveness.” Less than two weeks later, Biogen announced that it was cutting the price of Aduhelm in half, from $56,000 to $28,000 a year.

Four months after Biogen slashed the cost of Aduhelm, CMS is still pondering how to adjust the Part B premium — because half the rise in the premium’s cost was attributable to the original projected cost of Aduhelm. CMS has to calculate the Part B premium at 25 percent of the projected cost that will be incurred by that part of Medicare. There are roughly 63 million Americans paying the Medicare Part B premium, and perhaps 2 to 3 million people on Medicare who were actively using Alzheimer’s drugs as part of their therapy.

But CMS cost calculations were clearly too high, because Aduhelm only costs half as much as it did when cost projections were being made last year. “Certainly the rationale for an increase that high is gone,” a spokesman from the Brookings Institution told CNBC. “If I were administering this, I’d be concerned about setting a precedent for making changes in the middle of the year.”

 It may turn out that nothing happens this year. One option is that CMS will do nothing until 2023 to take into account the lower spending on Adulhelm, due not only to the reduced price tag for the drug, but also fewer elders using it because of the controversy over its uncertain effectiveness as a medication. CMS so far has only stated that it is still reexamining the premium and will provide further information as it becomes available.

The best advice at this point might be to just forget the idea of any cost cut in the Part B premium for this year. But do so after emailing this column to your members of Congress with a note which says: “Please remind CMS in 2023 that Medicare beneficiaries were over-charged on their Part B premium for the cost of Adulhelm coverage.

Al Norman worked in the field of elderly home care in Massachusetts for almost four decades. He has been writing opinion pieces for 50Plus Life for almost that long.

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