WASHINGTON – Medicare Part B outpatient premiums will jump $ 21.60 a month in 2022, one of the largest increases on record. On Friday, officials said about half of this was due to a new Alzheimer’s drug.
The increase will ensure that health care absorbs a significant chunk of the recently announced living wage social security benefit – a raise that has been increased to $ 92 a month for the average retiree, designed to cover rising gas and food prices that hurt older people.
Medicare told reporters Friday that roughly half of the increase is due to contingency planning if the program is ultimately to cover Aduhelm, a new Alzheimer’s drug from pharmaceutical company Biogen that costs $ 56,000 a year. The drug would add to the cost of outpatient care because it is administered intravenously in the doctor’s office and is covered under Part B.
The problem turns into a case study of how one expensive drug for a condition that affects millions of people can impact government spending and affect household budgets. People who do not have Alzheimer’s will not be protected from the cost of Aduhelm, as it is large enough to affect their insurance premiums.
The new Part B premium will be $ 170.10 per month in 2022, officials said. The $ 21.60 jump is the largest increase ever in dollar terms, albeit not in percentage terms. As recently as August, the Medicare Trustees report projected a smaller $ 10 increase from the current $ 148.50.
“The increase in Part B premium for 2022 is a constant indication that drug price increases threaten Medicare’s affordability and sustainability,” Medicare chief Chiquita Brooks-LaSour said in a statement. Officials said the other half of the increase in premiums was due to the natural growth of the program and adjustments made by Congress last year in response to the coronavirus pandemic.
The announcement Friday afternoon – the time span that government agencies use to post bad news – came as Congress is considering a Democratic bill backed by President Joe Biden that will limit what Medicare pays for drugs. However, under the latest compromise, Medicare will not be able to negotiate prices for recently released drugs. Medicare premium news could rekindle internal debate among Democrats.
“Today’s announcement… reaffirms the need for Congress to finally give Medicare the opportunity to negotiate a reduction in the cost of prescription drugs,” Rep. Frank Pallone said in a statement. “We just can’t wait any longer to provide real help to the elderly.” Pallone was a proponent of the original House of Representatives law, which called for a tougher approach to the pharmaceutical industry.
Alzheimer’s is a progressive neurological disease with no known cure that affects about 6 million Americans, the vast majority of whom are old enough to be eligible for Medicare.
Aduhelm is the first cure for Alzheimer’s in nearly 20 years. It doesn’t cure a vital condition, but the FDA has determined that its ability to reduce plaque build-up in the brain is likely to slow the progression of dementia. However, many experts say the benefits have not been clearly demonstrated.
Medicare has begun a formal assessment to determine if a drug should be covered, and a final decision is unlikely to be made until spring. Medicare is currently deciding on an individual basis whether to pay for Aduhelm.
Cost has traditionally been outside the definition of Medicare coverage. But even in this case, there is a lot of controversy about the effectiveness of Aduhelm. Last November, an FDA advisory panel almost unanimously voted against the approval recommendation, citing flaws in the company’s research. Several panelists resigned after the FDA approved the drug anyway, despite their objections.
A nonprofit think tank focused on drug pricing has estimated the actual cost of Adulhelm at between $ 3,000 and $ 8,400 per year, rather than $ 56,000 based on its unproven benefits.
But Biogen defended its prices, saying it has taken a close look at the cost of cutting-edge drugs for cancer and other diseases. The company also says it expects a gradual introduction of a cure for Alzheimer’s, rather than a hockey stick scenario in which costs will skyrocket. Nonetheless, Medicare officials told reporters that they need to prepare for contingencies.
Two House committees are investigating the development of Aduhelm, including contacts between company executives and FDA regulators.
Medicare reaches over 60 million people, including people 65 and older, and people with disabilities or serious kidney problems. Program costs are approaching $ 1 trillion per year.