By Ahmed Aboulenein
WASHINGTON (Reuters) -U.S. President Joe Biden claimed victory on Tuesday for a drop in costs for tens of millions of Americans covered by the Medicare health program, though it is primarily due to a decision to severely limit coverage of an expensive, new Alzheimer's drug.
Biden highlighted a drop in premiums next year for the first time in over a decade for Medicare Part B, which among other things covers doctor and hospital visits as well as drugs they administer. He said the result will be a saving of more than $60 a year per beneficiary.
"It's going to be a godsend for many families," Biden told healthcare advocates in a White House Rose Garden event.
“It’s going to take a little while for some of this to kick in, but it’s locked in,” he said.
The government Medicare plan covers some 35 million Americans aged 65 and older or who are disabled. Separately, private insurers provide benefits through Medicare Advantage plans to over 29 million people.
Biden portrayed the lower premiums as part of his efforts and those of fellow Democrats in Congress to reduce inflation and healthcare costs for older Americans, a crucial voting bloc ahead of upcoming midterm Congressional elections in November.
The Centers of Medicare and Medicaid Services (CMS), which runs the Medicare health plan, said on Tuesday the bulk of the drop comes from its limiting coverage of Biogen Inc (NASDAQ:BIIB)'s Alzheimer's drug Aduhelm to patients in clinical trials.
"The 2022 premium included a contingency margin to cover projected Part B spending for a new drug, Aduhelm. Lower-than-projected spending on both Aduhelm and other Part B items and services resulted in much larger reserves," the agency said.
The standard monthly premium for Medicare Part B enrollees will be $164.90 for 2023, down by $5.20 from 2022, CMS said. The agency had raised 2022 premiums by 14.5%, however, with projected costs for Aduhelm as one of the drivers.
Excluding the drug altogether would have resulted in premiums of $160.30 for 2022, CMS said earlier, meaning the 2023 premiums of 164.90 would have actually represented a 2.8% rise.
Aduhelm was approved over the objections of the Food and Drug Administration's outside advisers, who did not believe data definitively proved the drug's benefit to patients. The Medicare program restricted its coverage, which has led to severely limited use of the Biogen drug.