The nation’s top health official Monday directed Medicare to consider lowering the premium for the part of the program that covers visits to the doctor and other care outside hospitals. It marked the first time the vast federal health insurance system for older Americans and those with disabilities has rethought the monthly amount patients pay after a change has gone into effect.
Health and Human Services Secretary Xavier Becerra gave the instructions to the Centers for Medicare and Medicare Services (CMS), the agency that oversees the program, saying a review of the Part B premium is needed because of a price drop in a controversial Alzheimer’s drug that Medicare does not yet pay for but might begin covering soon.
Becerra’s directive comes just days before the agency is due to decide preliminarily whether to include the drug, Aduhelm, among the roster of medicines that Medicare covers. The Food and Drug Administration approved the drug in June, despite considerable dispute over whether there is enough evidence that it is effective.
Aduhelm’s manufacturer, Biogen, set its initial price at $56,000 – sparking an outcry from the drug’s proponents and critics alike. That price tag was part of the reason that, when CMS announced the Part B premium for 2022 in November, the monthly amount consumers must pay rose from $148.50 to $170.10. The increase is the largest in dollar amount in the program’s history, which dates to President Lyndon Johnson’s Great Society of the 1960s. In percentage terms, it is the fourth-largest hike.
In November, the agency noted great uncertainty about how much the drug would weaken Medicare’s already-fragile finances, if it were to be covered. “Depending on utilization, the potential costs for this course of treatment range from negligible to very significant,” the agency wrote in the Federal Register notice about this year’s premiums.
If 1 million of the roughly 62 million people on Medicare used Aduhelm, spending by the program on that drug alone would be nearly $57 billion a year, the Kaiser Family Foundation estimated several months ago. That would far exceed all other medicines combined covered through Medicare’s Part B, which includes infusion therapies such as Aduhelm and other drugs administered in doctor’s offices. (Medicare has a separate Part D, with private health plans covering medicine patients take at home.)
Late last month, Biogen cut Aduhelm’s price nearly in half, to $28,200.
In a two-sentence announcement of his directive, Becerra called the price change “dramatic,” and said it “is a compelling basis for CMS to reexamine” the monthly premium that began this month.
“It’s unprecedented for any administration to adjust premiums up or down while they’ve been announced,” said Tricia Neuman, a senior vice president at the health policy organization Kaiser Family Foundation who has specialized in Medicare for three decades. “I don’t know of any example.”
Becerra’s instruction did not come with any time frame for the Medicare agency to review the premium, and two federal health officials said there are no rules for such a process.
The agency “is reviewing the secretary’s statement to determine next steps,” said Beth Lynk, a CMS spokeswoman. The agency did not address the question of how long the rethinking might take or how it would work.
Neuman said that, in practical terms, any change would need to be coordinated with the Social Security Administration, because most people on Medicare have their premiums deducted from their monthly Social Security checks.
Beginning with this month’s checks, which start to be issued this week, Social Security has a 5.9% cost-of-living increase for 2022, but many people on Medicare may first notice that the relatively large premium increase for their health insurance is cutting into the size of their checks.