From The Ripley’s Believe-It-Or-Not Department:
You May Actually Pay Less for Medicare Part B in 2023
That headline, folks, is surprisingly not a typo. I truly had to do a double-take when I read this in last week’s Centers for Medicare & Medicaid Services (CMS) Daily Digest Bulletin: “Given the information available today, it is expected that the 2023 premium will be lower than 2022”.
CMS is the government agency that runs Medicare.
The CMS Bulletin referenced and provided information about a recently released Medicare report that recommends that “cost savings from lower-than-expected Medicare Part B spending be passed along to people with Medicare Part B coverage in the calculation of the 2023 Part B premium”.
At the start of this year, Medicare surprised many of its beneficiaries with a bigger than usual hike in Medicare Part B premium. The standard monthly premium that most people pay for Part B increased from $148.50 in 2021 to $170.10 in 2022. This increase translates to a year-over-year bump up of 14.5% ($21.60).
By comparison, Medicare Part B premiums last year (2021) increased by only $3.90 over the previous year (2020). Rates rose from $144.60 to $148.50 or 2% in 2021. Historically, since the inception of the Medicare program back in the 1960’s the compounded annual increase or growth rate in Part B premiums is roughly 7%. I’m told this generally tracks with medical inflation rates over the same period of time.
We’ll stay tuned and report out when the rates are set or if anything new comes to light. Until then I’ll probably keep my expectations in check for any roll-back in next year’s rates and adopt the old state of Missouri mantra, “show me”.
Why the bigger increase for 2022 and what’s changed since the increase went into effect in January?
When announcing 2022’s higher than expected rate increase late last year, CMS attributed much of the jump in Part B rates to the projected high cost of a soon-to-be-released treatment called Aduhelm. Aduhelm is a type of drug that would be used in treating the Alzheimers disease.
At the time, according to the Medicare report, Aduhelm was projected to cost an average of $56,000 per year. After the 2022 Medicare Part B premium was set, the manufacturer of Aduhelm actually reduced the price to an average of $26,200.
According to the report, CMS has preliminarily determined that reflecting these savings from the lower-than-expected cost of Aduhelm in the 2023 Medicare Part B premium will be the most effective way to deliver these savings back to the people paying the current higher rate for Medicare Part B. The agency is still assessing Medicare Part B costs before finalizing the premium recommendation for 2023. The 2023 rates will be announced in the Fall. Typically Part B rates for the next year are announced sometime in November.
We’ll stay tuned and report out to you when the 2023 rates are set or if anything new comes to light. Until then I’ll probably keep my expectations in check for any roll-back in next year’s rates and adopt the old state of Missouri mantra, “show me”.