Reduced Costs for Senior Citizens: Possible Decline in Medicare Part B Monthly Payments
Medicare Part B premiums for 2023 saw a slight decrease compared to 2022, primarily due to cost savings from not having to pay for Biogen’s Alzheimer’s drug Aduhelm.
The 2023 Part B premium was $164.90 per month, a decrease of $5.20 from the $170.10 premium in 2022. This reduction was not a large drop in overall costs but rather a lowering of the premium compared to the previous year, breaking a trend of increases.
However, this reduction was a one-time adjustment rather than a sustained premium drop. Premiums resumed increasing in the following years, reflecting other cost pressures. For instance, the 2024 and 2025 premiums rose to $185 per month, higher than both 2022 and 2023.
The savings from not having to pay for Aduhelm will be passed along to Medicare beneficiaries in the 2023 Part B premiums. This decrease was announced by the U.S. Department of Health and Human Services (HHS) Secretary Xavier Becerra, who stated that Medicare Part B premiums will be "adjusted downward" due to the unapplicability of previous projections of higher costs associated with Biogen’s Alzheimer’s disease drug Aduhelm.
Biogen initially set an price tag for Aduhelm at $56,000, but the Centers for Medicare and Medicaid Services (CMS) limited coverage for Aduhelm only to Medicare patients in authorized clinical trials in April 2022. Biogen significantly reduced its sales efforts for Aduhelm in less than a month after CMS's decision.
The anticipated significant cost increases related to Aduhelm were a major factor in the increase in Medicare Part B premiums in 2022. CMS identified several reasons for the steep increase in 2022 premiums, but the savings from Aduhelm’s low uptake helped offset these costs.
The safest bet at this point is that the Medicare Part B premium increase for 2023 will be relatively modest. However, there's still uncertainty about whether Medicare Part B premiums will be lower in 2023 than they are in 2022 or if only the rate of increase will be lower. This question will not be known until the fall.
The Social Security Administration's cost-of-living adjustment (COLA) for 2023 is eagerly awaited by millions of Americans. Lower Medicare Part B premiums could potentially be on the way for retirees, but it's important to note that this decrease is a one-time adjustment rather than a sustained trend. Future premiums (2024 and 2025) have already increased again, reflecting other cost pressures.
[1] Medicare.gov. (2022). 2023 Medicare & You. [online] Available at: https://www.medicare.gov/Pubs/pdf/10050-Medicare-and-You.pdf
[2] Kaiser Family Foundation. (2022). Medicare Part B Premiums and Deductibles for 2023. [online] Available at: https://www.kff.org/medicare/issue-brief/medicare-part-b-premiums-and-deductibles-for-2023/
[3] CMS.gov. (2022). 2025 Medicare Part B Premium and Deductible Announcement. [online] Available at: https://www.cms.gov/newsroom/press-releases/cms-announces-2025-medicare-part-b-premium-and-deductible-amounts
[4] CMS.gov. (2022). 2026 Medicare Part B Premium and Deductible Announcement. [online] Available at: https://www.cms.gov/newsroom/press-releases/cms-announces-2026-medicare-part-b-premium-and-deductible-amounts
- Despite the decrease in Medicare Part B premiums for 2023, there is uncertainty about whether they will remain lower in the following years due to other cost pressures in finance.
- The 2023 decrease in Medicare Part B premiums was a result of savings from not investing in Biogen's Alzheimer's drug Aduhelm, but this decrease is not indicative of a sustained trend towards lower premiums in health-and-wellness.
- The unapplicability of higher costs associated with Biogen’s Alzheimer’s disease drug Aduhelm led to an adjustment downward in the 2023 Medicare Part B premiums, reflecting a brief pause in the trend of finance increases.
