The U.S. Medicare system is dynamic, subject to annual changes that can range from subtle adjustments to more significant shifts. Every year, the Centers for Medicare and Medicaid Services (CMS) announces these new changes and policies ahead of the open enrollment period running from October 15 to December 7. Although sometimes adjustments to Medicare might not impact your payments or coverage much at all, they also have the potential to impact you financially. In this guide, we’re taking a look into the anticipated changes for 2024 to shed light on alterations to premiums, coverage, deductibles, and coinsurance across the different parts of Medicare.
Key Changes for 2024
Medicare premiums refer to the regular, ongoing payments that Medicare beneficiaries are required to make to maintain their coverage under the various parts of the Medicare program. In 2024, the Medicare Part A inpatient hospital deductible will be $1,632, which is an increase from $1,600 in 2023. Additionally, Medicare Part B premiums are set to increase to $174.70, a rise from $164.90 in 2023. The annual deductible for all Medicare Part B beneficiaries will be $240 in 2024, up from $226 in 2023.
Medicare Part A is one of the four parts of the Medicare program. It’s often referred to as “hospital insurance” and primarily provides coverage for inpatient hospital care and related services. Approximately 99% of Medicare beneficiaries do not pay a Part A premium, according to the Centers for Medicare & Medicaid Services. This is because they worked long enough to earn work credits — at least 40 — to qualify to pay no Medicare Part A premium.
If you need to pay for Part A coverage and have at least 30 quarters of employment, your premium remains $278 in 2024. For those with 30 to 39 quarters, the premium is $505 a month in 2024, a very slight decrease from $506 in 2023.
Medicare Part B covers physician services, outpatient hospital services, certain home health services, durable medical equipment, and other medical and health services that aren’t covered by Part A. As mentioned, the standard monthly premium for Medicare Part B in 2024 is set to be $174.70. This is a $9.80 increase from $164.90 in 2023.
Medicare Part D (Prescription Drugs)
The Part D premium is expected to decrease from $56.49 in 2023 to $55.50 in 2024, and new cost-sharing limits are on the horizon as well. When you reach $8,000 in out-of-pocket spending, Part D drug copayments or coinsurance will no longer apply for the rest of the calendar year.
Medicare Extra Help, also known as the Part D Low-Income Subsidy (LIS) program, is a federal program designed to assist Medicare beneficiaries with limited income and resources in paying for their prescription drug costs under Medicare Part D. This program is expanding in 2024, and more people will qualify for Extra Help. This allows qualified Medicare recipients to avoid deductibles, premiums, and benefit from fixed lower copayments. Additionally, after reaching the out-of-pocket maximum for covered drugs ($8,000 in 2024), catastrophic coverage begins. This eliminates cost-sharing for the rest of the year.
Medigap and Medicare Advantage
Medigap plans, or Medicare supplement insurance plans, are designed to fill gaps in Original Medicare coverage. These policies are sold by private companies, and they offer various coverage options and premiums.
Private companies offer Medicare Advantage plans (Part C), providing Part A, B, and sometimes D benefits. The CMS anticipates that the average monthly premiums for Medicare Advantage will be $18.50 in 2024, which is a slight increase from $17.86 in 2023.
Enrollment in these programs is expected to change as well. Medicare Advantage enrollment is projected to increase from 31.6 million in 2023 to 33.8 million in 2024. Due to the Inflation Reduction Act, many plans will also offer insulin at a $35 monthly copay or less.
2024 Premiums and Deductibles
Medicare premiums and deductibles are important components of the overall cost structure for individuals enrolled in Medicare. In 2024, Medicare premiums and deductibles are seeing quite a few updates from 2023 rates. In sum, you can expect the following adjustments to Medicare costs for 2024:
- Part A Premium: Free for most; up to $505 per month if purchased
- Part A Deductible: $1,632 per benefit period
- Part B Premium: $174.70 per month or higher based on income
- Part B Deductible: $240 per month; 20% coinsurance after deductible
- Part C Premium (Medicare Advantage): Varies by plan, averaging $18.50 per month
- Part D Premium: Varies by plan, averaging $55.50 per month
As we move into 2024, changes in Medicare costs bring both increases and decreases, with a focus on aligning with the evolving landscape of healthcare and the needs of beneficiaries. Staying informed about these changes helps you make well-informed decisions when selecting the most suitable Medicare plan for your unique circumstances.
Resource Links
“What’s Medicare?” via Medicare.gov
“Anniversary of the Inflation Reduction Act: Update on CMS Implementation” via the Centers for Medicare & Medicaid Services
“Medicare Advantage and Medicare Prescription Drug Programs to Remain Stable in 2024” via the Centers for Medicare & Medicaid Services
“Apply for Medicare Part D Extra Help program” via the Social Security Administration
“2024 Medicare Parts A & B Premiums and Deductibles” via the Centers for Medicare & Medicaid Services