Feds Announce 2024 Medicare Parts A & B Premiums and Deductibles

The Centers for Medicare & Medicaid Services (CMS) has unveiled the 2024 premiums, deductibles, and coinsurance amounts for Medicare Part A and Part B, alongside the 2024 Medicare Part D income-related monthly adjustment figures.

Medicare Savings Programs (MSPs) support over 10 million individuals in covering Medicare premiums and often other cost-sharing expenses. In an ongoing effort to enhance healthcare access and reduce costs for millions of Americans, the Department of Health and Human Services (HHS), under CMS, recently implemented a rule to streamline MSP enrollment. This change is anticipated to make coverage more affordable for an estimated 860,000 individuals. Additionally, the Part D low-income subsidy (LIS) assists in covering Part D premiums and reducing prescription drug costs. The recent Inflation Reduction Act has expanded eligibility for full LIS to a larger number of people.

Concerning Medicare Part B Premium and Deductible, this program encompasses services such as physician care, outpatient hospital services, select home health services, durable medical equipment, and other medical and health services not included in Medicare Part A. Each year, the Medicare Part B premium, deductible, and coinsurance rates are established according to provisions in the Social Security Act. 

In 2024, the standard monthly premium for Medicare Part B enrollees will be $174.70, reflecting an increase of $9.80 from the 2023 figure of $164.90. The annual deductible for all Medicare Part B beneficiaries will amount to $240 in 2024, indicating a $14 increase from the previous year's deductible of $226.

The escalation in the 2024 Part B standard premium and deductible primarily results from projected rises in health care expenditures, with a lesser influence from the remedy for the 340B-acquired drug payment policy during the 2018-2022 period under the Hospital Outpatient Prospective Payment System.

Starting in 2023, individuals whose full Medicare coverage terminated 36 months following a kidney transplant and who lack specific other types of insurance coverage may choose to continue Part B coverage for immunosuppressive drugs by paying a premium. In 2024, the standard immunosuppressive drug premium will amount to $103.00.

Regarding Medicare Part B Income-Related Monthly Adjustment Amounts, since 2007, a beneficiary's Part B monthly premium has been income-dependent, affecting approximately 8 percent of those enrolled in Medicare Part B. The following table displays the 2024 Part B total premiums for high-income beneficiaries with full Part B coverage:

The 2024 Part B total premiums for high-income beneficiaries who only have immunosuppressive drug coverage are shown in the following table:

Premiums for high-income beneficiaries with full Part B coverage who are married and lived with their spouse at any time during the taxable year but file a separate return, are as follows:

Premiums for high-income beneficiaries with immunosuppressive drug only Part B coverage who are married and lived with their spouse at any time during the taxable year but file a separate return, are as follows:

Medicare Part A Premium and Deductible

Medicare Part A covers inpatient hospitals, skilled nursing facilities, hospice care, inpatient rehabilitation, and certain home health services (remember, most long-term care is not covered by Medicare or supplements - only Long-Term Care Insurance, and, for those who qualify -- due to low income and assets -- Medicaid will cover in-home or facility long-term care.)

Approximately 99% of Medicare beneficiaries are exempt from Part A premiums, having accrued a minimum of 40 quarters of Medicare-covered employment, as determined by the Social Security Administration.

For 2024, the Medicare Part A inpatient hospital deductible, which beneficiaries are responsible for when admitted to a hospital, will amount to $1,632. This marks a $32 increase from the 2023 deductible of $1,600. 

The Part A inpatient hospital deductible covers the beneficiary's share of costs for the first 60 days of Medicare-covered inpatient hospital care within a benefit period. In 2024, beneficiaries will also be responsible for a coinsurance amount of $408 per day for the 61st through the 90th day of a hospitalization (compared to $400 in 2023) within a benefit period, as well as $816 per day for lifetime reserve days ($800 in 2023). 

Beneficiaries requiring extended care services in skilled nursing facilities will incur a daily coinsurance of $204.00 for days 21 through 100 in a benefit period in 2024, as opposed to $200.00 in 2023.

Enrollees aged 65 and older, with fewer than 40 quarters of coverage, and certain individuals with disabilities have the option to voluntarily enroll in Medicare Part A by paying a monthly premium. Those who had at least 30 quarters of coverage or were married to someone with at least 30 quarters of coverage can opt for Part A with a reduced monthly premium rate, which will remain at $278 in 2024, the same as in 2023. 

Specific uninsured individuals aged 65 and older, possessing less than 30 quarters of coverage, and certain individuals with disabilities who have exhausted other entitlements will be required to pay the full premium. For 2024, the full premium amount will be $505 per month, representing a $1 decrease from the 2023 rate.

For additional details on the 2024 Medicare Parts A and B premiums and deductibles (CMS-8083-N, CMS-8084-N, CMS-8085-N), please refer to https://www.federalregister.gov/public-inspection.

Medicare Part D Income-Related Monthly Adjustment Amounts

Since 2011, a beneficiary's Part D monthly premium has been determined based on their income. These income-related monthly adjustment amounts impact approximately 8 percent of Medicare Part D enrollees. These individuals are required to pay the income-related monthly adjustment amount in addition to their regular Part D premium. Part D premiums vary by plan, and regardless of how a beneficiary pays their Part D premium, the Part D income-related monthly adjustment amounts are either deducted from their Social Security benefit checks or paid directly to Medicare. 

About two-thirds of beneficiaries pay their premiums directly to the plan. In contrast, the remaining beneficiaries have their premiums deducted from their Social Security benefit checks. The 2024 Part D income-related monthly adjustment amounts for high-income beneficiaries are detailed in the following table:

Premiums for high-income beneficiaries who are married and lived with their spouse at any time during the taxable year but file a separate return, are as follows:

Long-Term Care Not Covered

Medicare and its supplements typically do not cover most long-term care expenses. While it provides coverage for up to 100 days of skilled care, often required for nursing home rehabilitation, and offers limited coverage for at-home recovery, it does not cover skilled services beyond the 100 days or any custodial long-term care (help with activities of daily living or supervision due to dementia.) Medicare supplements, also known as Medigap plans, serve to bridge some gaps in Medicare coverage, but they are not an answer for long-term care.

Medicaid, on the other hand, plays a crucial role in providing long-term care coverage for individuals with low income and limited assets. It serves as a safety net for those who require extended care and may not have the financial means to cover the costs themselves. 

In contrast, Long-term Care Insurance offers comprehensive long-term care coverage, including services like assisted living and home care. However, it's important to note that Long-term Care Insurance is medically underwritten, meaning that individuals usually need to purchase it before retirement when they are in good health to secure affordable coverage for potential future long-term care needs. 

Making informed decisions about long-term care financing options is essential to ensure financial security and access to necessary care in later years.

Review Medicare details:

Medicare and You -- Handbook 2024