The costs associated with your Medicare coverage change every year. The Centers for Medicare and Medicaid Services (CMS) determine Medicare costs based on several factors, including the cost of providing healthcare and inflation. No matter if you are covered by a Medicare Advantage plan or Original Medicare, you will see changes to the cost of your coverage. Here’s what to expect in 2024.
Medicare Advantage
If you have a Medicare Advantage plan, your insurance carrier sets your premium, deductibles, and coinsurances and CMS approves the prices. The Annual Notice of Change letter your insurance carrier sends out in September will spell out any changes to your current plan for 2024. Your Part A premium (if you pay one) and your Part B premium may be changing for 2024, as detailed below.
Part A Hospital Insurance
Premium: If you or your spouse worked 10 plus years, Part A is free. If you don’t qualify for premium-free Part A, what you pay is based on how much you worked. If you or your spouse worked at least 30 quarters, you will pay the reduced monthly premium of $278 – the same as in 2023. If you worked less than 30 quarters, you will pay the full monthly premium of $505 – a decrease from $506 in 2023.
Annual Deductible: The Part A deductible for each inpatient hospital admission is increasing from $1,600 to $1,632. This covers your share of costs for the first 60 days of a Medicare-covered inpatient stay, also known as the benefit period. There is no limit to the number of benefit periods you can have, which means you may pay this deductible more than once during the year.
Coinsurance: Varies with the location and length of your hospital stay.
- Days 1 to 60: $0 after you pay your Part A deductible
- Days 61 to 90: $408 per day, an increase from $400 in 2023
- Days 91 to 150*: $816 per day, an increase from $800 in 2023
*Known as “lifetime reserve days” because Medicare will only pay for these extra days once in your lifetime
Part A deductibles and co-insurances do not apply if you have a Medicare Advantage plan.
Part B Medical Insurance
Premium: The standard Part B premium for most Medicare beneficiaries will be $174.70 per month in 2024, up from $164.90 in 2023. Those with higher incomes may pay more. Your premium may also be higher if you did not enroll on time and you pay a late penalty.
Annual Deductible: $240, an increase from $226 in 2023.
The Part B deductible does not apply if you have a Medicare Advantage plan.
Medicare Supplement Plans
If you are covered by Original Medicare, you may also have a Medicare Supplement plan to help cover your out-of-pocket costs. These plans are offered by private insurance companies, and monthly plan premiums usually increase every year. Check with your insurance carrier to see if you should expect a premium increase.
Stand-Alone Part D Prescription Drug Plans
Premiums: If you have Original Medicare, you probably also have a Part D prescription drug plan. These are sold by private insurers, and premiums vary by plan. CMS estimates the average Part D premium will be $55.50 in 2024, down from $56.49 in 2023. Just like with Part B premiums, you may pay more if you have a higher income. You may also face a late enrollment penalty if you did not enroll on time.
Deductible: This varies by plan, but CMS has set the maximum annual deductible at $545 in 2024 – an increase from $505 in 2023.
Coinsurance: Varies by plan.
Other Important Changes to Part D Coverage in 2024
The Inflation Reduction Act of 2022 includes several provisions taking effect over the next few years to reduce your out-of-pocket drug expenses. In 2023, the cost of insulin was capped at $35 a month. In 2024, out-of-pocket costs associated with the “donut hole” will be reduced.
Understanding Changes to the Donut Hole
Whether you have your prescription coverage through a Medicare Advantage plan or a stand-alone Part D plan, the coverage gap (better known as the donut hole) may impact your out-of-pocket drug costs.
These are the changes to the three phases of Part D coverage for 2024:
Initial Coverage Phase
You are responsible for any deductible (if one applies to your plan and medications), copays, and coinsurance. These are determined by which tier your medications fall on.
You stay in the initial coverage phase until your drug costs total $5,030 (an increase from $4,660 in 2023). At this point, you enter the coverage gap.
Coverage Gap or Donut Hole
In the coverage gap, you are responsible for 25% of the cost of covered medications at the pharmacy until your out-of-pocket costs reach $8,000 (an increase from $7,400 in 2023), at which time, you enter the catastrophic coverage phase.
Catastrophic Coverage Phase
Once your out-of-pocket costs for the year reach $8,000, you will have $0 cost for the rest of the calendar year. In this phase, you previously had to pay 5% of the cost of the drug.
Help Paying for Prescriptions
Extra Help is a federal program that can help you pay your out-of-pocket prescription costs, if you qualify. In 2024, the program will expand, meaning more people will qualify. To receive this support, you can apply online, call Social Security at 1-800-772-1213 from Monday to Friday from 8 am to 7 pm, or make an appointment at your local Social Security office.
A Medicare Agent Can Help
A local, licensed Medicare agent can help you evaluate the changes for 2024 and ensure you have the right coverage to meet your individual needs. The experienced team at Healthcare Educators is here to help. Contact us today.