Now that you’re paying the new 2022 prices for Medicare Part B, let’s take a closer look at where your money is going.
New Alzheimer’s Drug
A large reason for the price increase is Aduhelm, a controversial new Alzheimer’s drug. In June 2021, the Food and Drug Administration greenlit the use of Aduhelm for treating Alzeheimer’s, a progressive brain disorder that affects 50 million people worldwide.
Medicare typically pays for FDA-approved drugs, and roughly 80 percent of potential Aduhelm patients are old enough to receive Medicare. But Medicare’s decision to cover the drug has not been made - at least not yet. Medicare plans to issue a preliminary decision on whether it will cover the Alzehimers drug in January.
Aduhelm is expensive, which is part of the reason why Part B premiums have increased. If Medicare does decide to cover Aduhelm, about 1.5 million Americans may be eligible. With higher premiums, there’s more money set aside in its reserves.
Higher Healthcare Spending
Another reason for the Part B premium increase is simple: more people are using the healthcare system. Some of the higher healthcare spending is being attributed to COVID-19. To date, the United States has surpassed 50 million COVID cases and over 800,000 deaths. In recent weeks, COVID cases and hospitalizations have increased due to the new Omicron variant.
The Baby Boomer generation is also getting older and needing more medical care. Baby Boomers are between the ages of 57-75 and living longer, though experiencing higher rates of obesity, diabetes, high cholesterol and hypertension. These conditions require long-term care and put a significant strain on health care costs.
Low Premium Increase in 2021
Due to the pandemic, Congress took action to significantly lower the Part B premium increase for 2021 to just $3. Congress added enough money to Medicare to cover healthcare costs to treat the coronavirus, as well as routine and preventive care during the crisis.
While last year’s break helped keep more money in Americans’ pockets, it’s now time to pay this back. This is also reflected in the Part B premium increase.
It’s highly recommended to speak with a financial advisor in NJ, if you haven’t already, to make sure you can cover your healthcare needs in retirement. To get in touch with an experienced financial planner who understands Medicare, contact Leonard Financial Solutions today.