One of the costs retirees pay — Medicare Part B premiums — may be increasing in 2024, driven by a new Alzheimer's treatment on the market.
The Medicare trustees projected in March that the standard monthly Part B premium may increase to $174.80 in 2024, an almost $10 monthly increase from the $164.90 standard monthly premium beneficiaries are currently paying.
Since that prediction, Leqembi, a treatment targeted at early stages Alzheimer's disease, has come under Medicare coverage following traditional approval from the Food and Drug Administration.
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Annual spending on the drug may make it the third most costly covered by Medicare Part B, according to KFF, a nonprofit provider or health research. As a result, Medicare Part B premiums — which are expected to cover approximately 25% of the program's costs — will likely go up.
Leqembi and services related to the treatment may add $5 per month to Part B premiums, bringing the total premium to $179.80 per month, according to a new estimate from The Senior Citizens League, a non-partisan senior group.
Most beneficiaries may see their Part B premium increase by almost $15 per month, while other costs may drive Medicare Part B premiums higher, The Senior Citizens League notes.
Medicare Part B generally covers medical services provided outside of hospitals. Beneficiaries typically pay a monthly fee in the form of a premium, in addition to annual deductible and coinsurance costs.
The estimate is subject to change.
"We'll know in maybe two to three months what the Part B premium will be for 2024," said Juliette Cubanski, deputy director of the Program on Medicare Policy at KFF.
If Part B premiums go up next year prompted by the new Alzheimer's drug, it will not be the first time. There was a 15% bump to Part B premiums between 2021 and 2022, which was "substantially above the norm," when another Alzheimer's treatment, Aduhelm, emerged, according to KFF.
However, Part B premiums dropped by 3% for 2023 in response to Medicare's decision to limit Aduhelm coverage.
How Part B premiums affect Social Security checks
The Senior Citizens League is currently predicting a 3% Social Security cost-of-living adjustment for 2024, based on the latest government inflation data. That would be substantially lower than the record 8.7% increase beneficiaries saw this year.
But just how much more beneficiaries may see in their 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 typically deducted directly from monthly Social Security checks. The risk for individuals with lower benefits is that they will see no increase to their benefits after the Medicare Part B premiums are deducted, according to Johnson.
In the past, the combination of the fluctuation of Social Security cost-of-living adjustments and Medicare Part B premiums has led some beneficiaries to see no increase to their monthly checks for two or three years at a time, she noted.
"It can lead to several years of no increases in benefits, even though the real inflation they experience is still occurring," Johnson said. "It leaves them relying more on savings or going into debt."
What 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 is unknown how many Medicare patients will meet the prescribing requirements for the drug or how many will opt 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 take up 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.