Seniors Will Have to Wait Until 2023 for Expected Medicare Premium Reduction
Health Care

Seniors Will Have to Wait Until 2023 for Expected Medicare Premium Reduction

Reuters/Lucy Nicholson

Seniors will have to wait until next year to see their Medicare Part B premiums reduced after the Centers for Medicare and Medicaid Services determined that a mid-year adjustment to reflect lower costs of a new Alzheimer’s drug would not be “operationally feasible.”

Medicare Part B premiums were raised by 14.5% this year, to $170.10 a month, as officials prepared for a potential spike in costs due to the rollout of a high-priced and controversial new Alzheimer’s drug, Biogen’s Aduhelm. “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,” CNBC’s Sarah O’Brien explains.

But after Biogen cut the price of the drug, lowering it from $56,000 a year to $28,200 amid tepid initial demand, Health and Human Services Secretary Xavier Becerra called for a review of the premiums. Medicare officials also decided to limit access to the new drug to patients enrolled in clinical trials following questions about its efficacy and the process that led to its approval.

Becerra announced Friday that the premium reductions would have to wait until 2023.

“After receiving CMS's report reevaluating the 2022 Medicare Part B premiums, we have determined that we can put cost-savings directly back into the pockets of people enrolled in Medicare in 2023,” he said in a statement. “We had hoped to achieve this sooner, but CMS explains that the options to accomplish this would not be feasible. CMS and HHS are committed to lowering health care costs – so we look forward to seeing this Medicare premium adjustment across the finish line to ensure seniors get their cost-savings in 2023.”

The bottom line: The premium reduction won’t happen this year, and it’s not clear yet what premiums will be for next year. “Given the information available today, it is expected that the 2023 premium will be lower than 2022,” CMS said in a statement Friday. “The final determination will be made later this fall.”