A Reduction In Medicare Part B Premiums Remains In Play. Here’s Where Things Stand

A possible reduction for Medicare Part B premiums is still in playSource: CNBC, by Sarah O’Brien

For Medicare beneficiaries wondering whether their Part B premiums could be reduced, the waiting continues.

More than three months after Health and Human Services Secretary Xavier Becerra ordered a reassessment of this year’s $170.10 standard monthly premium — a bigger-than-expected jump from $148.50 in 2021 — it remains uncertain when a determination will come and whether it would affect what beneficiaries pay this year.

 

“A mid-course reduction in premiums would be unprecedented,” said Tricia Neuman, executive director of the Medicare policy program at the Kaiser Family Foundation.

A spokesperson for the Centers for Medicare & Medicaid Services said the agency continues to reexamine the premium and will announce further information when it’s available.

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.

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.

Things have changed, however.

Several weeks ago, CMS officials announced that the program will only cover Aduhelm for beneficiaries who receive it as part of a clinical trial. Additionally, the per-patient price tag that actuaries had used in their calculation last year was cut in half, effective Jan. 1, by manufacturer Biogen — to $28,000 annually from $56,000.

“Certainly the rationale for an increase that high is gone,” said Paul Ginsburg, a nonresident senior fellow at the Brookings Institution and a health care policy expert.  “The question would be what’s administratively feasible.”

If a premium reduction occurs, there’s also the chance it could be applied for 2023 instead of 2022. There have been year-to-year drops in the Part B premium in the past for various reasons, including legislative changes to how the premium is calculated.

“If I were administering this, I’d be concerned about setting a precedent for making changes in the middle of the year,” Ginsburg said.

It’s also possible that lower-than-projected spending on Aduhelm could be at least partially offset by increased costs in other areas of Part B coverage, which includes outpatient care and medical equipment. 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 covered under Part B.

“Even if fewer people are using Aduhelm than originally projected and at a lower price than assumed, the actuaries may be inclined to take into account other changes that could moderate that amount,” Neuman said.

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 destroy 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 63 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.

CMS Proposes 5 Medicare Special Enrollment Periods

CMS proposes 5 Medicare special enrollment periods | Modern Healthcare

Source: Modern Healthcare, by Maya Goldman

Medicare Rights Center Supports Part B Drug Payment Model

Medicare Rights Center president Joe Baker testified in support of the CMS proposal to test new ways to pay for prescription drugs under Medicare Part B. He addressed a hearing held by the Subcommittee on Health of the U.S. House Committee on Energy and Commerce. The following is a summary of his comments:

Calls to withdraw the Part B Drug Payment Model fail to acknowledge…unrelenting beneficiary access challenges under the payment system. We applaud CMS for proposing to test solutions could alleviate calamitous cost burdens that cause too many older adults and people with disabilities to forgo necessary care. We urge members of Congress to support and strengthen the proposal by recommending improvements that put patients at the center of the payment model…Challenges affording health care affect nearly one in five callers on the Medicare Rights Center’s helpline. Sky-high cost sharing for Part B prescription drugs is a notable concern, most often for cancer and immunosuppressant medications. People with Medicare and taxpayers deserve a Medicare program that pays for high-value, innovative health care. The Part B Drug Payment Model presents an important opportunity to ensure that the Medicare program meets this high bar. 

CMS Proposes to Test Value-Based Payment Strategies for Part B

The Medicare Rights Center sent a letter CMS in support of its proposal to test value-based payment strategies for prescription drugs under Medicare Part B. According to CMS, the Part B prescription drug reimbursement model establishes a perverse incentive to prescribe higher cost medication. The reimbursement is determined by average-sales price plus 6%. CMS wants to test a variety of innovations, many of which are in use in the private insurance market. The new methods are designed to promote the most clinically effective medications, not the most expensive. CMS wants to test multiple strategies that encourage the use of high-value medications, especially those that eliminate or lower cost sharing for beneficiaries and promote evidence-based clinical decision support tools.

Joe Baker, president of Medicare Rights said, We’re confident that CMS’ proposed payment model will preserve beneficiary access to needed prescription drugs while advancing innovative strategies to ensure
that people who need Part B medications receive the highest value care available to them. We believe the proposal can yield results meaningful to today’s beneficiaries through enhanced care quality, and to future generations, through a stronger and more sustainable Medicare program.”

PhRMA Opposes Part B Reimbursement

Last week, the Centers for Medicare & Medicaid Services (CMS) released a proposed demonstration through the Innovation Center to change how Medicare Part B drugs are reimbursed. The Pharmaceutical Research and Manufacturers of America (PhRMA) has the following objections:

  1. Limits would be placed on patient access and provider choice by allowing the government to make one-size-fits-all decisions about health care. Selecting the right treatment depends on a variety of clinical factors, as well as needs, characteristics and preferences specific to an individual patient. Medicare Part B was set up to allow physicians to make the best decisions for their patients, offering a wide range of treatment options for patients suffering from serious illnesses, including cancer, rheumatoid arthritis, autoimmune disorders and more. This proposal would come between providers and patients by allowing the government to make one-size-fits all value judgments about the best care for Medicare patients. As new medicines become available, especially new targeted and personalized medicines, like President Jimmy Carter’s recent cancer treatment, Medicare physicians and patients should have those options available to them.
  1. Mandating broad changes for the majority of Medicare beneficiaries is government overreach. The Center for Medicare & Medicaid Innovation (CMMI) has the authority to test alternative payment models and new ways of paying for care. But it is just that: for testing promising new practices in small controlled groups. This proposal is mandatory and nationwide, which marks a dramatic departure from CMMI’s usual, voluntary testing approach. Rather, this model flies in the face of testing by making changes to payment for nearly all Part B medicines and mandating participation for three in four Medicare Part B providers in diverse settings, including hospital outpatient departments, physician offices and pharmacies. As a result, this model will affect care for Medicare patients across the country. Physicians treating the sickest patients could have their reimbursement cut dramatically, disproportionately impacting specialists who treat complex diseases. To test this model, CMMI will waive several provisions of Medicare law. Mandating broad changes to laws established by Congress without a thoughtful stakeholder process before and during development is a government overreach – and sets a bad precedent for establishing Medicare coverage and reimbursement policy.
  1. Broad changes that fail to recognize the value of innovative, targeted therapies could hinder future innovation. While policymakers are emphasizing accelerating personalized medicine, cancer cures and more, this proposal has the opposite effect. It could discourage investment in future treatment advances, many of which are expected to be Part B medicines, as well as have a negative impact on the adoption of novel targeted therapies that benefit patients. Medicare Part B already uses an effective, market-based mechanism to pay for medicines, and research shows Part B medicines are a small and stable share of Medicare Part B spending. Mandating nationwide, sweeping changes to this program without thoughtful consideration and process puts Medicare patients at risk. For more information, visit catalyst.phrma.org.

Anthem Increases Discount on Medicare Supplement Plan F

Anthem Blue Cross increased its monthly “New to Medicare” discount in California from $15 a month to $20 a month for the first year members are enrolled in an Anthem Blue Cross Medicare Supplement Plan F. That adds up to a savings of $240 for the year. The discount is available to those who are 65 or older who are within six months of their Part B effective date and have a coverage effective date starting March 1, 2016 or later. Members can also save, each year, if they pay their annual premium up front, have another household member on an Anthem Medicare Supplement plan, or sign up to pay their premiums electronically. Drug, dental, vision, and other benefits are available to accompany the plan for additional costs. Medicare supplement plans provide guaranteed coverage for life as long as the member pays premiums on time and provides accurate information at the time of application.

Medigap Continues to Provide Critical Financial Protection

Medicare supplement (Medigap) insurance remains a critical source of health coverage for low-income beneficiaries, particularly those living in rural areas, according to a  report from America’s Health Insurance Plans (AHIP). Enrollment has continued to grow over the past several years with more than 11 million Medicare beneficiaries enrolled in 2014. Medigap coverage helps cover significant out-of-pocket costs that are not covered by Medicare, such as deductibles, coinsurance, and copayments. As a result, Medigap beneficiaries are overwhelmingly satisfied with their coverage, and more than 9 in 10 would recommend Medigap to a friend or relative. The follow are key findings:

  • 48% of Medicare beneficiaries without any additional insurance coverage had Medigap policies in 2013.
  • 58% of Medigap policyholders in 2013 were women, and 42% were men.
  • 45% of Medigap policyholders were 75 years or older compared to only 38% of all Medicare beneficiaries.
  • 46% of rural Medigap policyholders and 39% of all Medigap enrollees had annual incomes below $30,000 in 2013.

2016 Medicare Parts A & B Premiums and Deductibles Announced

The Centers for Medicare & Medicaid Services (CMS) announced the 2016 premiums and deductibles for the Medicare inpatient hospital (Part A) and physician and outpatient hospital services (Part B) programs. There will be no Social Security cost-of-living increase for 2016. As a result, most people with Medicare Part B will be held harmless from any increase in premiums in 2016 and will pay the same monthly premium as last year, which is $104.90. CMS Acting Administrator Andy Slavitt said, “Our goal is to keep Medicare Part B premiums affordable. Thanks to the leadership of Congress and President Obama, the premiums for 52 million Americans enrolled in Medicare Part B will be flat or substantially less than they otherwise would have been.”

Beneficiaries who are not subject to the hold-harmless provision will pay $121.80. The following Medicare Part B beneficiaries are not subject to the hold-harmless provision:

  • Those who are those not collecting Social Security benefits.
  • Those who will enroll in Part B for the first time in 2016.
  • Dual eligible beneficiaries who have their premiums paid by Medicaid.
  • Beneficiaries who pay an additional income-related premium.

These groups account for about 30% of the 52 million Americans expected to be enrolled in Medicare Part B in 2016. Because of slow growth in medical costs and inflation, Medicare Part B premiums were unchanged for the 2013, 2014, and 2015 calendar years.

Since 2007, beneficiaries with higher incomes have paid higher Part B monthly premiums. These income-related monthly adjustment amounts affect fewer than 5% of people with Medicare. Under the Part B section of the Bipartisan Budget Act of 2015, high income beneficiaries will pay an additional amount. The IRMAA, additional amounts, and total Part B premiums for high income beneficiaries for 2016 are shown in the following table:

Beneficiaries who file an individual tax return with income: Beneficiaries who file a joint tax return with income: Income-related monthly adjustment amount Total monthly premium amount
Less than or equal to $85,000 Less than or equal to $170,000 $0 $121.80
Greater than $85,000 and less than or equal to $107,000 Greater than $170,000 and less than or equal to $214,000 48.70 170.50
Greater than $107,000 and less than or equal to $160,000 Greater than $214,000 and less than or equal to $320,000 121.80 243.60
Greater than $160,000 and less than or equal to $214,000 Greater than $320,000 and less than or equal to $428,000 194.90 316.70
Greater than $214,000 Greater than $428,000 268 389.80

Premiums for beneficiaries who are married and lived with their spouse at any time during the taxable year, but file a separate return, are as follows:

Beneficiaries who are married and lived with their spouse at any time during the year, but file a separate tax return from their spouse: Income-related monthly adjustment amount Total monthly premium amount
Less than or equal to $85,000 $0 $121.80
Greater than $85,000 and less than or equal to $129,000 194.90 316.70
Greater than $129,000 268 389.80

Medicare Part A covers inpatient hospital, skilled nursing facilities, and some home health care services. About 99% of Medicare beneficiaries do not pay a Part A premium since they have at least 40 quarters of Medicare-covered employment. The Medicare Part A annual deductible that beneficiaries pay when admitted to the hospital will be $1,288 in 2016, a small increase from $1,260 in 2015. The Part A deductible covers beneficiaries’ share of costs for the first 60 days of Medicare-covered inpatient hospital care in a benefit period. The daily coinsurance amounts will be $322 for the 61st through 90th day of hospitalization in a benefit period and $644 for lifetime reserve days. For beneficiaries in skilled nursing facilities, the daily coinsurance for days 21 through 100 in a benefit period will be $161 in 2016 ($157.50 in 2015).

Enrollees age 65 and over who have fewer than 40 quarters of coverage and certain people with disabilities pay a monthly premium in order to get coverage under Part A. People with 30-39 quarters of coverage may buy into Part A at a reduced monthly premium rate, which will be $226 in 2016, a $2 increase from 2015. Those with less than 30 quarters of coverage pay the full premium, which will be $411 a month, a $4 increase from 2015.

Deductibles and Coinsurance for 2016

Part A Deductible and Coinsurance Amounts for Calendar Years 2015 and 2016
Type of Cost Sharing
2015 2016
Inpatient hospital deductible $1,260 $1,288
Daily coinsurance for 61st-90th Day 315 322
Daily coinsurance for lifetime reserve days 630 644
SNF coinsurance 157.50 161

The Pitfalls of Enrolling in Medicare Part B

The Medicare Rights Center released a report detailing common enrollment challenges for people who are new to Medicare. The report, “Medicare Part B Enrollment: Pitfalls, Problems and Penalties,” includes a compelling story of a caller to the Medicare Rights Center helpline. He chose to delay enrolling in Medicare Part B, believing that he had adequate health coverage when he turned 65. Based on confusing information received from his health plan, he made a choice that caused him to be without adequate health coverage and will require him to pay a lifetime premium penalty for Medicare Part B. Unfortunately, this caller is not alone, in 2012, 740,000 beneficiaries were paying Part B late enrollment penalties.

“Simple, streamlined and standardized information and tools are needed to adequately educate the thousands of individuals who become eligible for Medicare each day,” said Jonathan Blum, former principal deputy administrator of CMS and Medicare Rights board member. Joe Baker, President of the Medicare Rights Center said, “Stories of Medicare enrollment woes are all too common, and will likely become increasingly so as the Baby Boom generation ages into the Medicare program.”

The report recommends that Congress, the Social Security Administration, and CMS do the following:

  • Enhance notification and education for those who are new to Medicare.
  • Reform the Medicare enrollment periods to eliminate needless gaps in the start of health coverage.
  • Strengthen avenues for relief, giving greater opportunity for retroactive enrollment and the elimination of premium penalties.
  • Conduct more research on how many people face Medicare enrollment challenges and how many could be affected in the future. 

The report is available at: http://www.medicarerights.org/policy/priorities/part-b-enrollment-nov-2014/.

Part B premiums stay the same for 3rd straight year

Most seniors will pay the same monthly premium for Medicare Part B next year that they did this year: $104.90. Deductibles for hospital coverage under Part A are rising by $44. The Washington Post (tiered subscription model)/The Associated Press (10/9)

Last Updated 05/25/2022

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