Potential Rise in 2024 Medicare Part B Premiums Linked to New Alzheimer’s Medication
Retirees may face an increase in Medicare Part B premiums in 2024, a consequence of a new Alzheimer’s drug entering the market. In March, the Medicare trustees forecasted a potential rise in the standard monthly Part B premium to $174.80 in 2024, a nearly $10 monthly increase from the current $164.90 standard monthly premium.
Since this forecast, a new Alzheimer’s drug, Leqembi, designed for early-stage Alzheimer’s disease, has been approved by the Food and Drug Administration and is now covered by Medicare. This could make it the third most expensive drug covered by Medicare Part B, as per health research nonprofit KFF. Consequently, Medicare Part B premiums, which are designed to cover about 25% of the program’s costs, are likely to increase.
The Senior Citizens League, a non-partisan senior group, estimates that Leqembi and related services could add an extra $5 per month to Part B premiums, making the total premium $179.80 per month. Most beneficiaries could see their Part B premium increase by nearly $15 per month, while other costs could push Medicare Part B premiums even higher.
Medicare Part B generally covers medical services provided outside of hospitals. Beneficiaries usually pay a monthly fee as a premium, along with annual deductible and coinsurance costs. However, these estimates could change.
“We’ll have a clearer picture of the Part B premium for 2024 in a couple of months,” said Juliette Cubanski, deputy director of the Program on Medicare Policy at KFF.
If Part B premiums increase next year due to the new Alzheimer’s drug, it won’t be a first. There was a 15% increase in Part B premiums between 2021 and 2022, significantly above the average, when another Alzheimer’s drug, Aduhelm, was introduced, according to KFF. However, Part B premiums decreased by 3% for 2023 after Medicare decided to limit Aduhelm coverage.
The Senior Citizens League is currently predicting a 3% Social Security cost-of-living adjustment for 2024, based on the latest government inflation data. This is significantly lower than the record 8.7% increase beneficiaries saw this year. However, the actual increase in beneficiaries’ checks will depend on the size of the Part B premium for next year, according to Mary Johnson, Social Security and Medicare policy analyst at The Senior Citizens League.
Medicare Part B premium payments are usually deducted directly from monthly Social Security checks. This means that individuals with lower benefits may see no increase in their benefits after the Medicare Part B premiums are deducted, according to Johnson.
In the past, the combination of fluctuations in Social Security cost-of-living adjustments and Medicare Part B premiums has led some beneficiaries to see no increase in their monthly checks for two or three years at a time, she noted.
“It can result in several years of no increases in benefits, despite the ongoing real inflation they experience,” Johnson said. “This forces them to rely more on savings or accrue debt.”
As for what the new treatment means for Medicare patients, Medicare will cover Leqembi for patients with mild cognitive impairment or mild dementia with confirmed amyloid plaques, according to KFF.
It’s uncertain how many Medicare patients will meet the prescribing requirements for the drug or how many will choose to take it, KFF points out. However, Leqembi and other treatments will likely lead to higher Medicare spending, since the vast majority of patients who would qualify for the drugs are covered by Medicare, Cubanski said.
Leqembi is priced at $26,500 before insurance coverage. Medicare patients may pay more than $5,000 annually for the treatment, according to KFF.
That out-of-pocket cost is “conservative,” Cubanski said, and does not include any additional medical services or scans patients who use the treatment would need in order to monitor its effects.
Patients who are prescribed the drug and are covered by original Medicare — Parts A and B managed by the federal government — will pay a 20% coinsurance after they have paid their Part B deductible, according to the Centers for Medicare and Medicaid Services. Other patients who have supplemental coverage or secondary insurance, such as Medigap or Medicare Advantage, may face different costs.
A second Alzheimer’s treatment may be approved for market before the end of the year.
The uptake of emerging Alzheimer’s treatments may not be large in the near term due to the trade-offs of the clinical benefits with some pretty serious side effects shown in clinical trials, according to Cubanski.
“I think we can expect there to be a lot of discussions between patients and their providers about whether these drugs are worth taking,” she said.
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