Medicare Ordered to Consider Lowering 2022 Part B Premiums

U.S. Department of Health and Human Services (HHS) Secretary Xavier Becerra has ordered the agency that regulates Medicare to reassess its record-high Part B premium increase for 2022 "given the dramatic price change of the Alzheimer's drug Aduhelm."

The Centers for Medicare and Medicaid Services (CMS), part of HHS, announced in November that the basic monthly premium in 2022 for Medicare Part B, which covers doctor visits, diagnostic tests and other outpatient services, would be $170.10, up from $148.50 in 2021. That $21.60 hike was the largest dollar Part B basic premium increase in the health insurance program's history.

Among the reasons CMS gave for the outsize increase was that it needed to set aside money in its reserves in the event it decides to cover Aduhelm, the new Alzheimer's drug approved in June by the U.S. Food and Drug Administration (FDA). At the time, Biogen, the medication's manufacturer, estimated the drug's price would be $56,000 a year. Since then and after considerable pushback, Biogen cut its price estimate roughly in half, saying the drug would cost $28,200 annually effective Jan. 1. CMS has issued a proposal to cover Aduhelm on a limited basis for people enrolled in clinical trials. The agency is expected to make a final decision in April about covering the medication.  

“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.”

Becerra said in a one-paragraph statement on Jan. 10 that with the 50 percent Aduhelm price drop, there is "a compelling basis" for CMS to reexamine its Part B premium increase.

CMS said the other factors that contributed to the large premium hike were rising prices to cover health care, some of which were attributed to the COVID-19 pandemic, and the action Congress took in 2021 to curb that year's Part B premium increase in the midst of the health emergency. In 2021, the Part B premium increased by only $3 a month, but Congress directed CMS to begin paying that reduced premium back, starting in 2022.

Through its Fair Rx Prices Now campaign, AARP has been fighting for lower prescription drug prices, urging federal and state elected officials to curb the runaway cost increases that millions of older Americans have faced for many years. Prescription drug prices have consistently increased well above the overall rate of inflation. AARP officials noted that the fact that a pharmaceutical company could cut the price of Aduhelm in half shows how arbitrary their pricing decisions are.