Medicare Owes Retirees a Refund, Says Powerful Senior Group

Despite receiving the highest cost of living adjustment in four decades, seniors on Social Security have faced some financial challenges this year. In addition to rising prices on goods and services, Medicare premiums rose and ate up a large portion of the raise most retirees got in 2022.

A powerful senior group is arguing that Medicare may owe older Americans a refund. If the Centers for Medicare and Medicaid Services acts, retirees could get higher Social Security checks in the coming months and possibly even a back payment for some of the big premiums they paid this year.

Here is what you need to know.

Why seniors may be owed a refund for large Medicare premiums

The Senior Citizens League is an advocacy group for older Americans that was established back in 1992 and focuses on lobbying lawmakers and telling the public about relevant issues.

The organization called for retirees to receive refunds for a portion of their Medicare Part B premiums. The premiums cost $170.10 per month for most retirees and are withdrawn from Social Security checks. This is up from the previous year. Some Americans pay more.

The Senior Citizens League believes that the large year-over-year premium increase isn't justified and that retirees are paying more than they should.

Half of the Medicare premium increase was due to the cost of one drug, Aduhelm, according to the organization. When premiums were set, the new Alzheimer's medication cost $56,000 per patient. The expected costs were taken into account when setting Part B premiums.

The cost of Aduhelm has been slashed in half, and patients can be treated for just $28,200. The fact that few patients are likely to be prescribed the medication this year may mean that Medicare will be spending less than anticipated.

Retirees should get a break if that is the case. The Senior Citizens League believes that the Part B premium should be reduced. Retirees would face lower costs going forward if that were to happen.

The Senior Citizens League believes retirees are being over charged. Lawmakers wrote to the Administrator of Centers for Medicare and Medicaid Services asking for a rethink of the large hike in Part B premiums. In light of the price break for Aduhelm, the Department of Health and Human Services urged the Centers for Medicare and Medicaid Services to reduce Medicare costs.

If this change occurs, it remains to be seen. If it does, it could provide some relief from the ongoing financial struggles seniors are facing this year by allowing them to keep more of their Social Security raise for other costs besides insurance coverage.