Is This Drug to Blame for Your Soaring Medicare Premium?

A nurse holding a bottle of intravenous therapy
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Medicare premiums will soar in 2021 — and at least one federal government official says a new drug used to treat Alzheimer’s disease is partially to blame.

As we have reported, the Medicare Part B standard premium will jump by $21.60 in 2022, while the Part B annual deductible will rise by $30. These hikes have surprised and outraged many Medicare recipients.

However, an unnamed official with the federal Centers for Medicare and Medicaid Services (CMS) told CNN that about $10 of the Part B premium increase is due to the cost of covering the expensive new drug Aduhelm.

The rest of the premium increase is due to “a general increase in health care prices and usage, as well as from congressional action that limited the rise in Part B premiums for 2021 amid the coronavirus pandemic,” CNN reports.

To date, CMS has not decided whether it will cover Aduhelm at all, or exactly how it will do so if it decides to approve coverage of the drug, according to CNN. However, CNN adds that Medicare usually covers drugs that the U.S. Food and Drug Administration approves.

The FDA approved Aduhelm for use earlier this year. The list price set for a year of Aduhelm treatment, which involves intravenous infusions, is around $56,000.

The Kaiser Family Foundation estimates that the cost to Medicare of treating Alzheimer’s patients with Aduhelm could escalate rapidly. It notes that in 2017, almost 2 million Medicare beneficiaries used at least one of the currently available Alzheimer’s treatments covered under Medicare Part D, which covers prescription drugs. According to Kaiser:

“If just one-quarter of these beneficiaries are prescribed Aduhelm, or 500,000 beneficiaries, and Medicare pays 103% of $56,000 in the near term, total spending for Aduhelm in one year alone would be nearly $29 billion, paid by Medicare and the patients who use this drug — an amount that far exceeds spending on any other drug covered under Medicare Part B or Part D, based on 2019 spending.”

Kaiser adds that total Medicare spending for all Part B drugs was $37 billion in 2019.

Critics of escalating drug prices say the projected impact of Aduhelm on next year’s Medicare premiums is evidence that legislation should be enacted to stop such increases. Tricia Neuman, executive director of the Kaiser Family Foundation’s Program on Medicare Policy, tells CNN:

“This does show how just one drug could have a major impact on spending and premiums. Without a change in current law, there’s little the administration can do on its own to protect seniors.”

Looking for ways to cut the cost of your prescription drugs? Read “5 Websites You Should Check Before Buying Prescriptions.”

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