The Centers for Medicare & Medicaid Services (CMS) released a report that recommends cost savings from lower-than-expected Medicare Part B spending be passed along to people with Medicare Part B coverage in the calculation of the 2023 Part B premium. Earlier this year, Department of Health and Human Services (HHS) Secretary Xavier Becerra instructed CMS to reassess the 2022 Part B premium amount in response to a price reduction for Aduhelm™, a monoclonal antibody directed against amyloid for use in treating Alzheimer’s disease. Given the information available today, it is expected that the 2023 premium will be lower than 2022. The final determination will be made later this fall.
“At the Secretary’s direction, CMS reassessed the Medicare Part B premium and recommends that the identified savings be incorporated into the Medicare Part B premium for 2023,” said CMS Administrator Chiquita Brooks-LaSure. “Due to changes in the cost of Aduhelm™ and coverage since the premium was established, CMS recommends that the lower-than-anticipated spending in 2022 be incorporated into the 2023 Part B premium determination. The Biden-Harris Administration remains committed to lowering health care costs for beneficiaries by increasing price transparency, lowering the cost of prescription drugs, and connecting people to savings programs.”
Medicare Part B covers physician services, outpatient hospital services, certain home health services, durable medical equipment, and certain other medical and health services not covered by Medicare Part A, which covers inpatient hospital care, skilled nursing facility, hospice, lab tests, surgery, home health care.
As detailed in the report, when calculating the Part B premium, CMS builds in a reserve to ensure the Medicare Supplementary Medical Insurance (SMI) Trust Fund remains adequately financed for the year. In 2022, CMS appropriately built in a reserve to ensure the SMI Trust Fund could cover the potential costs of Aduhelm™ and similar drugs. At the time CMS announced the premium in Fall 2021, Aduhelm™ cost an average of $56,000 per year, and CMS had not yet issued a National Coverage Determination (NCD). After the 2022 Medicare Part B premium was set, the manufacturer of Aduhelm™ reduced the price to an average of $26,200, and CMS finalized Medicare coverage with evidence development for Aduhelm™ and similar, future FDA-approved drugs with an indication for use in treating the Alzheimer’s disease. CMS determined that reflecting these savings in the calculation of the 2023 Medicare Part B premium is the most effective way to deliver these savings back to people with Medicare Part B. CMS is still assessing other current and projected Medicare Part B costs to inform the premium recommendation for 2023, which will be announced in Fall 2022 consistent with the statutory process.
In November 2021, CMS announced that the Part B standard monthly premium increased from $148.50 in 2021 to $170.10 in 2022. This increase was driven in part by the statutory requirement to prepare for potential expenses, such as spending trends driven by COVID-19 and uncertain pricing and utilization of Aduhelm™. Despite the increase, most people with Medicare saw a significant net increase in Social Security benefits due to a higher-than-usual Cost of Living Adjustment (COLA) in 2022.