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.

Premiums Are Lower When There Are More Hospitals

More competitive hospital markets had more than 8% reductions in premiums. That translates into savings of more than $20 a month for consumers in markets with less hospital concentration, according to a report commissioned by America’s Health Insurance Plans (AHIP). The report, authored by Scott Thompson, Ph.D. and published in the Antitrust Health Care Chronicle, finds that hospital systems with strong market influence can often negotiate higher rates for their services. Each additional effective hospital competitor is associated with a 1.5% drop in the cost of insurance premiums. Consumers in more competitive markets, such as Los Angeles, saw average monthly savings of $32.90 in reduced premiums when compared to consumers purchasing coverage in San Francisco, a market with fewer hospital competitors.

AHIP president and CEO Karen Ignagni said, “Consumers and employers benefit from competitive markets that promote affordability and choice. More needs to be done to encourage competition among providers. Hospital consolidation comes with a price that consumers and employers simply cannot afford.”

Last Updated 05/25/2022

Arch Apple Financial Services | Individual & Family Health Plans, Affordable Care California, Group Medical Insurance, California Health Insurance Exchange Marketplace, Medicare Supplements, HMO & PPO Health Care Plans, Long Term Care & Disability Insurance, Life Insurance, Dental Insurance, Vision Insurance, Employee Benefits, Affordable Care Act Assistance, Health Benefits Exchange, Buy Health Insurance, Health Care Reform Plans, Insurance Agency, Westminster, Costa Mesa, Huntington Beach, Fountain Valley, Irvine, Santa Ana, Tustin, Aliso Viejo, Laguna Hills, Laguna Beach, Laguna Woods, Long Beach, Orange, Tustin Foothills, Seal Beach, Anaheim, Newport Beach, Yorba Linda, Placentia, Brea, La Habra, Orange County CA

12312 Pentagon Street - Garden Grove, CA 92841-3327 - Tel: 714.638.0853 - 800.731.2590
Email:
Jay@ArchApple.com
Copyright @ 2015 - Website Design and Search Engine Optimization by Blitz Mogul