Medicare Part B Premiums: A Potential Increase in 2024 Due to New Alzheimer’s Treatment
Retirees may need to brace themselves for a potential increase in one of their regular costs — Medicare Part B premiums — in 2024. This projected increase is primarily driven by a new Alzheimer’s treatment recently entering the market.
The Projected Increase in Medicare Part B Premiums
Earlier this year, the Medicare trustees projected that the standard monthly Part B premium may increase to $174.80 in 2024. This represents an almost $10 monthly increase from the current standard monthly premium of $164.90 that beneficiaries pay. However, since this prediction, a new player has entered the scene that could further impact these projections.
Leqembi, a treatment targeted at the early stages of Alzheimer’s disease, has been approved by the Food and Drug Administration and is now covered under Medicare. This new development could drive the premiums even higher.
The Financial Implications of Leqembi
According to KFF, a nonprofit provider of health research, annual spending on Leqembi may make it the third most costly treatment covered by Medicare Part B. As a result, Medicare Part B premiums, which are expected to cover approximately 25% of the program’s costs, are likely to go up.
The Senior Citizens League, a non-partisan senior group, estimates that Leqembi and services related to the treatment may add $5 per month to Part B premiums. This would bring the total premium to $179.80 per month. Most beneficiaries may see their Part B premium increase by almost $15 per month, while other costs may drive Medicare Part B premiums even higher.
Past and Future Changes in Part B Premiums
It is important to note that this would not be the first time Part B premiums have increased due to a new Alzheimer’s drug. There was a 15% bump to Part B premiums between 2021 and 2022 when another Alzheimer’s treatment, Aduhelm, emerged. However, Part B premiums dropped by 3% for 2023 in response to Medicare’s decision to limit Aduhelm coverage.
The current estimate for the 2024 premium is subject to change. Juliette Cubanski, deputy director of the Program on Medicare Policy at KFF, stated, “We will know in maybe two to three months what the Part B premium will be for 2024.”
Impact of Part B Premiums on Social Security Checks
The potential increase in Medicare Part B premiums could also affect Social Security checks. Based on the latest government inflation data, the Senior Citizens League is currently predicting a 3% Social Security cost-of-living adjustment for 2024. This would be substantially lower than the 8.7% increase beneficiaries saw this year.
However, the actual increase beneficiaries may see in their checks will depend on the size of the Part B premium for next year. Medicare Part B premium payments are typically 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.
Implications of New Treatment for Medicare Patients
Medicare will cover Leqembi for patients with mild cognitive impairment or dementia with confirmed amyloid plaques. However, it is unknown how many Medicare patients will meet the prescribing requirements for the drug or how many will opt to take it. 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.
Leqembi is priced at $26,500 before insurance coverage. Medicare patients may pay more than $5,000 annually for the treatment. This out-of-pocket cost does not include additional medical services or scans patients who use the treatment would need to monitor its effects.
Future Developments in Alzheimer’s Treatments
Looking ahead, a second Alzheimer’s treatment may be approved for market before the end of the year. However, the uptake of emerging Alzheimer’s treatments may not be prominent in the near term due to the trade-offs of the clinical benefits with some pretty severe side effects shown in clinical trials. These developments will continue to shape the landscape of Alzheimer’s treatments and their impact on Medicare Part B premiums.
FAQs
Why might Medicare Part B premiums increase in 2024?
The potential increase is primarily driven by a new Alzheimer’s treatment, Leqembi, that has recently entered the market and is now covered under Medicare.
How much could the premiums increase?
The Senior Citizens League estimates that 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.
How will the premium increase affect Social Security checks?
Medicare Part B premium payments are typically 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.
Who will be eligible for the new Alzheimer’s treatment, Leqembi?
Medicare will cover Leqembi for patients with mild cognitive impairment or dementia with confirmed amyloid plaques.
How much will Leqembi cost Medicare patients?
Leqembi is priced at $26,500 before insurance coverage. Medicare patients may pay more than $5,000 annually for the treatment.
Are there any other Alzheimer’s treatments on the horizon?
A second Alzheimer’s treatment may be approved for market before the end of the year. However, the uptake of emerging Alzheimer’s treatments may not be prominent in the near term due to the trade-offs of the clinical benefits with some severe side effects shown in clinical trials.
Source: CNBC
