Medicare Part B Premium Reduction Won't Happen This Year

• About half of the larger-than-expected 2022 premium increase, set last fall, was attributed to the potential cost of covering the Alzheimer's drug Aduhelm.
• The cost of Aduhelm was cut in half after the premium was determined, and treatment is limited to certain patients.
• Any savings that result from lower-than-estimated spending this year will be applied to the calculation for the 2023 Part B premium, which will be set later this year.

Your Medicare Part B premiums won't be reduced this year, the government has announced.

After being directed by Health and Human Services Secretary Xavier Becerra in January to reassess this year's $170.10 standard monthly premium — a bigger-than-expected 14.5% jump from $148.50 in 2021 — the Centers for Medicare & Medicaid Services has released a report determining that a mid-year correction is not feasible. Instead, any savings that result from lower-than-estimated spending this year will be applied to the calculation for the 2023 Part B premium.

About half of the larger-than-expected 2022 premium increase, set last fall, was attributed to the potential cost of covering Aduhelm — a drug that battles Alzheimer's disease — despite actuaries not yet knowing the particulars of how it would be covered because Medicare officials were still determining that.

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While Medicare Part D provides prescription drug coverage, some medicines are administered in a doctor's office — as with Aduhelm, which is delivered intravenously — and therefore fall under Part B (which covers outpatient care and medical equipment).

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. So in its calculation for 2022, the agency had to account for the possibility of broadly covering Aduhelm.

However, the per-patient price tag that actuaries had used in their calculation subsequently was cut in half by manufacturer Biogen — to $28,200 annually from $56,000. Additionally, CMS officials announced in April that Medicare will only cover Aduhelm for beneficiaries who receive it as part of a clinical trial.

The 2022 premium would have been set at $160.40 if the Aduhelm cost was what it is now and the determination of coverage had already occurred, the CMS report said.

While President Joe Biden's 2023 budget projections show the Part B premium remaining at $170.10, the CMS report notes that when the amount is set later this year, it will reflect additional information such as actual 2022 claims data and is likely to differ somewhat from what's shown in the budget.

"It is certain, however, that any additional funding caused by including the uncertainty of potential Aduhelm costs in the 2022 premium will be used to reduce the necessary financing in 2023 and later," according to the CMS report.

Roughly 6 million Americans suffer from Alzheimer's, a degenerative neurological disease that slowly destroys memory and thinking skills, and has no known cure. It also can wreck the lives of families and friends of those with the disease.

Most of these patients are age 65 or older and generally enrolled in Medicare, which covers more than 64.2 million individuals.

In 2017, about 2 million beneficiaries used one or more of the then-available Alzheimer's treatments covered under Part D, according to the Kaiser Family Foundation.