A universal truth is something that is widely accepted and agreed on as fact, something that does not change over time and location. For instance:
- Water is wet
- The sun sets in the west
- Insurance premiums always go up
Well guess what… that last one may not be entirely correct. While premiums normally move in only one direction—straight up—that may actually change in 2023.
In a May 27 press release, Department of Health and Human Services (HHS) Secretary Xavier Becerra announced that the Medicare Part B premium will be adjusted downward in 2023.
We don’t yet know how much premiums will decrease, but the move is being made “to account for an overestimate in costs attributable to the inclusion of new Alzheimer's drug Aduhelm within the Medicare program for reimbursement” in 2022. CMS, the Centers for Medicare and Medicaid Services, wanted to make this change in the current year, but there are “legal and operational hurdles in adjusting Medicare premiums midstream.”
As you may recall, the standard Medicare part B premium increased 14.5% between 2021 and 2022, from $148.50 last year to $170.10 this year. The rate increase was detailed in a December 17, 2021 AHCP blog post.
CMC provided a report to the Secretary back on May 19. In it, CMS says that “roughly half” of the 2022 Medicare Part B premium increase was due to the new Alzheimer’s drug Aduhelm. The “drug’s average price of $56,000 per year, uncertain utilization, and uncertain Medicare coverage” were all “factored into the actuarial models used to calculate the adopted premium recommendation.”
However, the manufacturer of Aduhelm announced in December, 2021 that “it would cut its average price in half to $28,200. In response, in January 2022, the HHS Secretary instructed CMS to reassess its recommendation for the 2022 Medicare Part B premium.”
Following the assessment, CMS recommended “incorporating the savings realized from the difference between assumed and actual Part B spending into the 2023 Part B premium determination.”
Secretary Becerra is taking CMS’s advice. In the press release, he says this: “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.”
While this is great news for Medicare beneficiaries, we do not know at this time what the actual adjustment to the Part B premium for 2023 will be and whether that adjustment will be enough to fully offset the annual increase. We should have next year’s numbers in a few months.