Key Takeaways
- Medicare premiums and deductibles for 2024 will see moderate increases, especially in Parts A and B, impacting beneficiaries’ healthcare costs.
- Income-related adjustments will lead to higher costs for some, while new rules under Part D will cap prescription drug spending.
How Medicare Premiums and Deductibles Are Shifting—Here’s What to Expect
2024 has brought several important changes to Medicare premiums, deductibles, and other out-of-pocket expenses. These changes are part of Medicare’s regular cost adjustments aimed at reflecting inflation and healthcare costs. For beneficiaries, understanding these shifts is crucial in planning their healthcare budgets and avoiding surprises.
Medicare Part A: Higher Deductibles for Hospital Stays
Medicare Part A covers inpatient hospital stays, skilled nursing facilities, hospice care, and limited home health services. While most people don’t pay a premium for Part A because they or their spouse have worked long enough to qualify, there are still several costs associated with this coverage that are increasing in 2024.
Part A Deductible Increases
For beneficiaries who require hospital care, the inpatient hospital deductible will increase from $1,600 in 2023 to $1,632 in 2024. This means that, before Medicare starts covering hospital care, you will need to pay this amount out of pocket. Once the deductible is met, Medicare covers the full cost for the first 60 days of hospital care.
Beyond this, the daily coinsurance rates have also increased slightly. From the 61st to the 90th day of hospitalization, beneficiaries will pay $408 per day, up from $400 in 2023. If the hospital stay lasts longer, beneficiaries use their lifetime reserve days, which now cost $816 per day, an increase from $800 the previous year.
For those needing skilled nursing care, the coinsurance for days 21-100 has risen from $200 to $204 per day in 2024. These increases, while modest, can add up quickly for longer stays or extended care.
2024 Part A Cost Breakdown
| Cost Type | 2023 | 2024 |
|---|---|---|
| Inpatient Hospital Deductible | $1,600 | $1,632 |
| Coinsurance (61st-90th day) | $400/day | $408/day |
| Lifetime Reserve Days | $800/day | $816/day |
| Skilled Nursing Facility (21-100 days) | $200/day | $204/day |
Medicare Part B: Premiums and Deductibles on the Rise
Medicare Part B covers outpatient services, including doctor visits, preventive care, and medical equipment. In 2024, both the monthly premium and the annual deductible for Part B have increased, continuing the trend of rising healthcare costs.
Standard Part B Premium Increase
The standard monthly premium for Medicare Part B has risen to $174.70 in 2024, up from $164.90 in 2023. This is the amount most beneficiaries will pay. However, those with higher incomes will continue to face surcharges through the Income-Related Monthly Adjustment Amount (IRMAA), which increases premiums based on income levels.
IRMAA for High-Income Beneficiaries
If you earn more than $103,000 (single) or $206,000 (joint filers), you’ll pay a higher monthly premium based on your income. These additional charges can bring your monthly premium up to $559 for the highest income brackets. Income-related adjustments apply to approximately 8% of Medicare beneficiaries, and they are set based on your modified adjusted gross income (MAGI) from two years prior.
Part B Deductible Increases
In addition to higher premiums, the annual deductible for Part B has increased to $240 in 2024, up from $226 in 2023. After meeting this deductible, Medicare covers 80% of outpatient services, and beneficiaries are responsible for the remaining 20%.
2024 Part B Premium Breakdown
| Income Range (Single Filers) | Monthly Premium 2024 |
|---|---|
| Up to $103,000 | $174.70 |
| $103,000 – $129,000 | $244.60 |
| $129,000 – $161,000 | $349.40 |
| $161,000 – $193,000 | $454.20 |
| $193,000 – $500,000 | $559.00 |
Medicare Part D: Prescription Drug Changes
For beneficiaries enrolled in Medicare Part D, which covers prescription drugs, 2024 will bring both savings and some new cost responsibilities.
Lower Premiums and Enhanced Benefits
The average premium for Part D plans is expected to decrease slightly to $55.50 per month, down from $56.49 in 2023. While premiums may decrease, beneficiaries will benefit from new rules that cap out-of-pocket spending on prescription drugs.
Out-of-Pocket Spending Cap
One of the most important changes under Part D is the introduction of an $8,000 out-of-pocket spending cap. After a beneficiary spends $8,000 on prescription drugs in a calendar year, Medicare will cover all remaining costs for the year. This cap is a significant relief for individuals who require expensive or long-term medications.
Insulin Cost Cap
Beneficiaries who need insulin will continue to benefit from a $35 monthly cap on insulin costs, thanks to the ongoing provisions of the Inflation Reduction Act. This limit applies to all covered insulin products and will remain in place for 2024.
2024 Part D Key Changes
| Category | 2023 | 2024 |
|---|---|---|
| Average Monthly Premium | $56.49 | $55.50 |
| Out-of-Pocket Cap for Prescription Drugs | None | $8,000 |
| Insulin Cost Cap | $35/month | $35/month |
Medicare Advantage (Part C): Additional Benefits and Stable Premiums
For those enrolled in Medicare Advantage (Part C) plans, premiums remain relatively stable in 2024, while access to extra benefits has expanded. These private plans offer an alternative to Original Medicare, often bundling additional services like vision, dental, and hearing care, and are known for having lower out-of-pocket costs.
Stable Premiums
The average premium for Medicare Advantage plans is expected to remain at around $18.50 per month in 2024. Though some plans may see slight increases, overall, beneficiaries can expect to pay similar amounts to what they paid in 2023.
Expanded Services
Many Medicare Advantage plans are adding new services and benefits in 2024, particularly for behavioral health services and home healthcare. These additional services help reduce the need for hospital stays and offer beneficiaries more flexible care options.
Financial Planning for Medicare in 2024
With the increase in premiums, deductibles, and other out-of-pocket costs, financial planning is essential for Medicare beneficiaries in 2024. Here are some key tips to help manage these changes:
1. Review Your Medicare Coverage Annually
Every year during the open enrollment period (October 15 – December 7), review your Medicare coverage to ensure it still meets your healthcare needs. Compare plans to determine if switching to a Medicare Advantage plan or adding a Medigap policy could lower your out-of-pocket costs.
2. Maximize Savings on Prescription Drugs
If you take multiple medications, consider switching to generic alternatives to save money. Also, look into Medicare’s Extra Help program, which offers subsidies to lower the cost of prescription drugs for low-income beneficiaries.
3. Consider Additional Coverage
Adding a Medigap policy, which can help cover deductibles, copayments, and coinsurance, may be an effective way to manage rising out-of-pocket costs. Alternatively, Medicare Advantage plans may offer lower premiums and additional benefits, but it’s essential to ensure they cover your specific healthcare needs.
How to Stay Ahead of Medicare Cost Increases
As costs rise, staying informed about changes to Medicare is key. Review your options regularly and explore financial assistance programs like Medicare Savings Programs or Medicaid for beneficiaries with limited incomes. These programs can help offset rising healthcare costs and ensure you receive the care you need without straining your finances.
