Are Medicare Part B Premiums Going Down Next Year?

Tricare users over age 65 using Tricare for Life must register for Medicare Parts A and B.
Tricare users over age 65 using Tricare for Life must register for Medicare Parts A and B. (U.S. Air Force photo)

Rachel Christian is a certified educator in personal finance and a senior writer for The Penny Hoarder.

Medicare beneficiaries should see a reduction in their Part B premiums next year after the federal government announced lower-than-expected spending on a controversial Alzheimer's disease drug called Aduhelm.

Tricare users over age 65 using Tricare for Life must register for Medicare Parts A and B.

Here's a recap of what led up to this point and what to expect moving forward.

A Historically High Part B Premium Increase in 2022

Medicare beneficiaries got hit with an ugly surprise last year: The biggest year-over-year Part B premium increase in the federal program's history was on its way.

Medicare Part B -- which covers doctor visits, outpatient surgery, durable medical equipment and other services -- jumped a whopping $21.60 at the beginning of 2022 to $170.10 a month.


Government officials said part of the 14.5% jump was due to an expensive new Alzheimer's disease treatment called Aduhelm.

The Centers for Medicare & Medicaid Services (CMS) wasn't sure whether it would cover Aduhelm when 2022 Part B premiums were announced in November.

While Medicare Part D covers prescription drugs and is not required for Tricare for Life users, Part B covers some medications that are administered in a doctor's office -- like Aduhelm, which is delivered intravenously.

The complex infusion treatment is extremely expensive, with an initial price tag of $56,000 a year.

At the time, CMS said it "must plan for the possibility of coverage for this high cost Alzheimer's drug" because it could lead to significantly higher expenditures for the Medicare program.

The new drug is controversial in the medical community. Aduhelm received special accelerated FDA approval last summer despite widespread concerns from health care professionals over limited testing data and unproven effectiveness.

CMS Makes a Decision on Aduhelm

A few things have changed since November.

First, Biogen -- Aduhelm's manufacturer -- cut the price of the drug from $56,000 per year to $28,200 in December after several months of sluggish sales.

Second, CMS finally released its National Coverage Determination rule for Aduhelm in April.

Instead of widely covering the Alzheimer's drug for all beneficiaries, CMS will cover Aduhelm only when administered to eligible patients during clinical trials.

This will save CMS a lot of money, and the federal government says it will pass those savings to beneficiaries.

"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," said Department of Health and Human Services Secretary Xavier Becerra during a May 27 announcement.

Have questions about your Medicare coverage? Nonprofit volunteers at the State Health Insurance Assistance Program can help.

What All This Means for Your Part B Monthly Premiums

Many Medicare beneficiaries hoped for a midyear premium readjustment this year following CMS's Aduhelm coverage determination.

But it appears relief won't arrive until next year.

CMS determined that a midyear premium readjustment would "not be operationally feasible" for the agency.

It went on to note in its May 16 report that reconfiguring beneficiary premiums now "would be extremely burdensome," noting that reprogramming the Social Security Administration systems "would take a significant amount of time and other resources."

CMS also noted that the Part B premium has never been redetermined halfway through a coverage year.

So Part B premiums will stay the same for the rest of the year. But how much could Medicare Part B premiums decrease in 2023?

CMS wrote that 2022 premiums would have been set at $160.40 -- about $10 cheaper -- if Aduhelm's cost was what it is now and the coverage determination had already taken place.

Medicare beneficiaries won't know the exact 2023 Part B premium until the new amount is announced this fall.

The CMS report notes that the new premium amounts will reflect other information such as actual 2022 claims data.

This article was originally published by The Penny Hoarder.

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