Key Takeaways
- Medicare costs, including premiums, deductibles, and coinsurance rates, will increase in 2024. Part A inpatient hospital deductibles and Part B outpatient premiums are especially impacted.
- Higher-income beneficiaries will face surcharges, while new cost-saving measures will benefit those with prescription drug needs, especially for insulin and out-of-pocket limits.
Medicare Costs Are Changing—Here’s What That Means for Your Wallet
With 2024 underway, Medicare is introducing several significant cost adjustments. These changes will impact millions of Americans, especially those relying on Medicare for inpatient care, outpatient services, or prescription drugs. From rising premiums and deductibles to new prescription drug cost controls, the evolving costs will have implications for both current and soon-to-be beneficiaries.
Medicare Part A: Higher Costs for Hospital Stays and Skilled Nursing Care
Medicare Part A, which covers inpatient hospital care, hospice services, and some home health care, will see its costs rise for 2024. The good news is that about 99% of beneficiaries will continue to enjoy premium-free Part A, as long as they or their spouse worked for at least 10 years (40 quarters). However, those with fewer quarters worked will face premiums of $278 per month for those with 30 to 39 quarters, while those with fewer than 30 quarters will pay $505 per month in 2024.
The inpatient hospital deductible has increased by $32 from 2023, bringing it up to $1,632 for 2024. This deductible must be met before Medicare covers hospital services. Beyond the deductible, coinsurance costs rise with the length of the hospital stay. For hospital stays between 61 and 90 days, beneficiaries will now pay $408 per day in coinsurance, an increase from $400 in 2023. After 90 days, lifetime reserve days kick in, costing $816 per day in 2024.
For those receiving care in skilled nursing facilities, the daily coinsurance for days 21 through 100 has also increased, rising to $204 per day in 2024. These increases highlight the need for beneficiaries to carefully plan for unexpected hospitalizations or extended care needs.
2024 Part A Costs at a Glance
| Category | 2023 | 2024 |
|---|---|---|
| Inpatient Hospital Deductible | $1,600 | $1,632 |
| Daily Coinsurance (61-90 Days) | $400 | $408 |
| Lifetime Reserve Days Coinsurance | $800 | $816 |
| Skilled Nursing Facility Coinsurance | $200/day | $204/day |
Medicare Part B: Higher Premiums and Deductibles
Medicare Part B, which covers doctor visits, outpatient services, and medical equipment, also sees cost increases in 2024. The standard monthly premium has increased to $174.70, up from $164.90 in 2023. This increase applies to most beneficiaries, but higher-income individuals will pay more based on their income, due to Income-Related Monthly Adjustment Amounts (IRMAA).
Income-Related Adjustments for Higher-Income Beneficiaries
If your income exceeds certain thresholds, your monthly Part B premium will increase. The IRMAA surcharges for 2024 are based on income levels, with individuals earning above $103,000 paying premiums ranging from $244.60 to as much as $559 per month, depending on their income bracket.
Deductible Increases for Part B
In addition to higher premiums, the Part B deductible is also increasing from $226 in 2023 to $240 in 2024. After meeting the deductible, Medicare typically covers 80% of approved services, leaving beneficiaries responsible for the remaining 20%. This may seem small, but those with frequent doctor visits or ongoing outpatient treatments could see their healthcare expenses add up quickly.
2024 Part B Costs at a Glance
| Category | 2023 | 2024 |
|---|---|---|
| Standard Monthly Premium | $164.90 | $174.70 |
| Annual Deductible | $226 | $240 |
| Premium (High-Income Bracket) | $164.90 – $560 | $174.70 – $559 |
Medicare Part D: Prescription Drug Changes
One of the most significant updates for 2024 involves Medicare Part D, which covers prescription drugs. While the average premium for standalone Part D plans is expected to decrease slightly from $56.49 in 2023 to $55.50 in 2024, other changes to out-of-pocket drug costs will have a larger impact on beneficiaries.
Lower Prescription Costs Due to Policy Changes
The Inflation Reduction Act continues to shape Medicare Part D. Notably, insulin costs are capped at $35 per month for many beneficiaries, providing significant relief for those managing diabetes. Additionally, once a beneficiary’s out-of-pocket drug costs exceed $8,000 in 2024, Medicare will cover 100% of their prescription drug costs for the rest of the year. This new benefit could save many beneficiaries hundreds, if not thousands, of dollars annually.
2024 Part D Changes at a Glance
| 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): Stable Premiums, Enhanced Services
For beneficiaries enrolled in Medicare Advantage (Part C), which is an alternative to Original Medicare and often includes additional benefits like dental or vision coverage, 2024 offers relatively stable premiums. The average Medicare Advantage premium will increase slightly to $18.50, up from $17.86 in 2023. Despite this slight increase, many beneficiaries are unlikely to see dramatic changes to their monthly costs.
Expanded Coverage and Changes in Prior Authorization
Medicare Advantage plans are also expanding access to services like behavioral health and are under pressure to reduce the burden of prior authorization requirements, making it easier for beneficiaries to receive the care they need without unnecessary delays. This is part of an ongoing effort by Medicare to ensure more equitable access to services, particularly in underserved communities.
Financial Planning Tips for Medicare Beneficiaries in 2024
Given the increased costs associated with Medicare in 2024, it’s more important than ever for beneficiaries to take steps to manage their healthcare expenses. Here are several tips to help you navigate these changes:
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Review Your Coverage During Open Enrollment: Medicare’s annual open enrollment period, from October 15 to December 7, is the perfect time to reassess your current coverage. Compare your existing plan with other options available to ensure you are getting the most cost-effective coverage for your needs.
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Consider Medigap or Medicare Advantage: If you are enrolled in Original Medicare and face high out-of-pocket costs, consider adding a Medigap (Medicare Supplement Insurance) policy. Alternatively, you may want to switch to a Medicare Advantage plan, which often includes additional benefits like vision or dental care.
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Maximize Prescription Drug Savings: Take advantage of the Part D changes, including the $35 monthly insulin cap and the out-of-pocket spending limit of $8,000. If you take multiple medications, ask your doctor about generic options, which can lower your prescription costs further.
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Look into Medicare Savings Programs: If you have limited income and resources, you may qualify for a Medicare Savings Program (MSP), which can help cover premiums, deductibles, and other out-of-pocket costs.
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Explore Financial Assistance Programs: In addition to MSPs, programs like Extra Help can assist with prescription drug costs, potentially saving you hundreds of dollars annually.
Moving Forward: Preparing for 2024 Medicare Changes
The 2024 changes to Medicare premiums, deductibles, and out-of-pocket limits emphasize the need for careful financial planning. Beneficiaries, particularly those with higher healthcare needs or higher incomes, will need to adjust their budgets to account for these new costs. By reviewing your coverage annually, taking advantage of available savings programs, and exploring additional coverage options like Medigap, you can better manage your healthcare expenses and ensure you receive the care you need without breaking the bank.
