Medicare Costs Could Gobble Up Next Year’s COLA

The proposed cost-of-living-adjustment (COLA) to Social Security benefits for 2024 — about 3% — is looking a bit skimpy, especially compared with this year’s super-sized 8.7% increase.

If you’re on Medicare, there’s another change on the horizon: the hike in Part B premiums. This cost is automatically deducted from the Social Security check for most beneficiaries.

This year, the cost of Part B actually dipped. Don’t expect the same gift for 2024. The Medicare Trustees forecast back in March that next year’s Part B premiums would rise about 6%, from $164.90 to $174.80.

But that estimate didn’t factor in the cost of Medicare coverage for a new Alzheimer’s drug — known by the brand name Leqembi, or lecanemab. And it’s one expensive drug. Without insurance, Leqembi could cost $26,000 a year. Because of this drug, next year’s Part B premiums could cost as much as $15 more each month — closer to an 8% increase.

You’ll have to wait a little longer to find out just how much more you’ll get from Social Security and what you might pay for Medicare. The COLA is announced in October and Medicare prices in November. The Centers for Medicare and Medicaid Services (CMS) is anticipating that while Part B premiums will rise, the cost of Part D for drug coverage will be lower — but only by about $1 a month.

For more on how the COLA is calculated, see Money reporter Mary Ellen Cagnassola’s story.

— Jill Cornfield, deputy editor

The annual raise for Social Security beneficiaries — known as the cost-of-living adjustment, or COLA — will be 3.2% for 2024, according to an estimate from the Senior Citizens League. The COLA for this year was the highest in more than 40 years due to astronomically high inflation. So 3.2% might seem paltry, but it’s higher than the 2.6% average over the past two decades.

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