With the current revaluation of the projected Medicare Part B costs, it’s possible to see a reduction in the Part B premium. Medicare beneficiaries saw a cost of living increase of 5.9%, the largest in decades. The excitement of this prospect was quickly dashed by a $22 increase in the Medicare Part B premium.

What causes the Part B Premium to increase?

Part B covers the medical services side of Medicare, and it has a premium payment. Everything that happens in the economy and medical fields could affect this premium. This year the Medicare Part B premium had one of the most significant increases. It was increased from $148.50 to $170.10 in 2022.

Medicare evaluates costs associated with Medicare annually and can adjust the premium accordingly. Each year CMS is required to set the Part B premium at 25% of the estimation of the costs of part B for the upcoming year.

Why was the 2022 Part B premium increase significantly higher?

This year’s evaluation was partially due to a new Alzheimers prescription Aduhelm. The projected cost of Aduhelm was $56,000 a year for a patient to be treated for Alzheimer’s. January 1st saw Biogen, the maker of Aduhelm, slash the drug’s cost to $28,200.

Why would a prescription drug cause such an Impact on the Part B premium?

Generally, when a high-cost Medication is offered, the cost is spread primarily to the patients that use them. Patients with health conditions such as cancer, ALS, and Rheumatoid arthritis, to name a few. But in this case, the high cost of Aduhelm would be spread among all Medicare beneficiaries and not just those with Alzheimer’s disease.

This will affect all beneficiaries. After all, it’s an injectable drug administered in the doctor’s office. This shifts Aduhelm to be covered as a Part B drug by Medicare. Most prescription drugs are covered under part D. However, medications administered in a doctor’s office are typically covered under Medicare Part B.

This is the first new medication to treat Alzheimer’s in almost 20 years. The FDA states that Aduhelm reduces the clusters of plaque that form on the brain and may slow early-stage dementia.

While the Biogen drug was approved by the FDA in June, many scientific communities have objected to its side effects and effectiveness. Side effects include brain swelling and bleeding.

Will the Part B premium be reduced in 2022?

There has never been a precedent requiring the revaluation and possible reduction of the Part B premium. Still, given the situation, it’s definitely possible. If the cost is half of the projection, it makes sense to lower the Part B premium.

The millions of beneficiaries on Medicare who pay $170.10 for the Medicare Part B premium will not see a quick change to the premium. It does pave the way for a possible reduction later in the year.

Days after the drug manufacturer Biogen cut the cost of Aduhelm, HHS secretary Xavier Becerra stated. “Today, I’m instructing the Centers for Medicare and Medicaid Services (CMS) to reassess the recommendation for the 2022 Medicare Part B premium, given the dramatic price change of the Alzheimer’s drug, Aduhelm. With the 50% price drop of Aduhelm on January 1st, there is a compelling basis for CMS to reexamine the previous recommendation.”

Biogen’s CEO, Michel Vounatsos, stated the following reason for the price change. “Too many patients are not being offered the choice of Aduhelm due to financial considerations and are thus progressing beyond the point of benefitting from the first treatment to address an underlying pathology of Alzheimer’s disease. We recognize that this challenge must be addressed in a way that is perceived to be sustainable for the U.S. healthcare system.”

No one knows yet how the revaluation would go. HHS has outlined a proposal that Medicare would only cover the drug in certain situations and could limit the number of beneficiaries that can receive it.

The revaluation is preliminary, and the final decision is expected in the spring.

If you have questions on how you can save on your Medicare Part B premiums, give us a call or fill out our online request form. There could be plans in your area that pay a portion of your Part B premium.

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by Lindsay Malzone, Lindsay Malzone is the Medicare expert for Medigap.com. She's been contributing to many well-known publications as an industry expert since 2017. Her passion is educating Medicare beneficiaries on all their supplemental Medicare options so they can make an informed decision on their healthcare coverage.