Possible Reduction in Medicare Part B Costs?
As many of you have already noticed, Medicare Part B (outpatient coverage) premiums increased significantly for 2022. The base premium increased 14.5% from $148.50 (2021) to $170.10 (2022).
Given widespread inflation, many chalked up the increase in Part B premiums to the fact that everything else was simply getting more expensive.
However, the major factor in the increase in Part B premiums was not only due to an increase in the cost of healthcare but rather the anticipated release of a new costly Alzheimer’s medication, Aduhlem.
With Medicare, medications that are dispensed at the pharmacy and taken orally are typically billed under Medicare Part D. However, medications that are administered as an infusion in a provider setting are typically billed in Medicare Part B as an outpatient service.
For individuals with a Medigap supplemental plan such as a Plan F/G or N, Part B medications are covered 100% (after the annual deductible for Plan G/N). For individuals on a Medicare Advantage plan, out of pocket costs for Part B medications are limited to a set maximum for each year.
This is in contrast with Part D prescription plans where individuals have to pay usually 25-33% the cost of Tier 5 speciality medications up to a combined $7,050 (2022), after which the cost drops down to 5% of the total medication cost.
For Aduhlem, the anticipated cost of the infusion was originally set at approximately $56,000 per person per year. This cost multiplied by the 5.6 million Americans diagnosed with Alzheimer's resulted in a whopping $325 billion in anticipated costs - a little under 40% of the entire Medicare budget. Given these numbers, a 14.5% increase seems light by comparison.
However, the adoption of the new drug was much less than anticipated. As a result, Biogen, the maker of Aduhelm, has slashed the cost of the medication by half to $28,200 due to a lack of demand.
Since then, Health and Human Services (HHS) has called for a reassessment of Medicare Part B premiums due the lower anticipated expenses. Although there are no figures on the anticipated decrease (if any), this new development will hopefully keep the price of Medicare stable at least in the next year.
For more information, please visit: https://www.kff.org/policy-watch/medicares-coverage-decision-for-the-new-alzheimers-drug-and-why-it-matters/