Well, it’s that time of year again when leaves change color and the federal government tells you how much more Medicare will cost you next year. The Bureau of Labor Statistics (BLS) says that 13% of spending by the typical senior goes to healthcare. For 2024, folks with Original Medicare will see increases to all premiums and deductibles.

 

Medicare Part B

Medicare Part B covers outpatient care, such as physician services, outpatient hospital services, and durable medical equipment. In 2024 the monthly premium increases from $164.90 to $174.70 per month, an increase of $9.80 or 6%.

 

Additionally, there is a Part B deductible that has to be paid by the individual before Medicare begins to pay. It will increase from $226 in 2023 to $240 next year—an increase of $14 or a little more than 6%.

 

For people receiving a Social Security payment, Medicare premiums are automatically deducted from their check. So, the 6% Medicare increase will cut into the 3.2% Social Security cost-of-living-adjustment (COLA) for 2024. COLAs are determined by the Consumer Price Index for Urban Wager Earners and Clerical Workers (CPI-W) while Medicare costs are based on Medicare’s per-person cost. Those two are seldom in sync.

 

According to the Center for Retirement Research at Boston College, Social Security COLAs averaged 2.2% between 2000 and 2020, while annual increases in the Part B premium averaged 5.9% during the same period.

 

Part B Income-Related Monthly Adjustment Amounts

Medicare Part B premiums are based on income. In 2024, the standard monthly Part B premium of $174.70 only applies to:

  • Individuals, and married people filing separate federal income tax returns, with a modified adjusted gross income (MAGI) of up to $103,000 (compared with $97,000 in 2023)
  • Married couples filing jointly with a MAGI of up to $206,000 (compared with $194,000 in 2023)

 

People with incomes above those thresholds will pay their Part B premiums plus an additional amount called the Income-Related Monthly Adjustment Amount (IRMAA). In 2024, the additional premium will range from $244.60 to $594.00 per month depending on income and federal tax-filing status. You can find the list of IRMAAs here.

 

Medicare Part A

Medicare Part A covers inpatient care, such as inpatient hospital services as well as skilled nursing facility services. Most Medicare beneficiaries don’t have to pay a premium for Part A coverage because they worked long enough and paid enough Medicare taxes into the system. But there are costs associated with Part A, and all of them are going up in 2024.

  • Inpatient deductible (for the first 60 days of a hospitalization in a benefit period): $1,632, up from $1,600 in 2023.
  • Coinsurance (for the 61st through 90th day of a hospitalization in a benefit period): $408 per day, up from $400 in 2023.
  • Coinsurance for lifetime reserve days: $816 per day, up from $800 in 2023.
  • Skilled nursing facility coinsurance: $204 per day, up from $200 in 2023

 

Medicare Advantage Plans

Original Medicare, which is Part A and Part B, is offered by the federal government. The other type of Medicare insurance is a Medicare Advantage plan (MA), which is offered by private insurance companies. MA plans are sometimes referred to as all-in-one plans because they provide the same Part A and Part B services as Original Medicare, but most provide prescription drug services as well as dental, vision, and hearing coverage.

 

Many MA plans have a zero-dollar premium. How does that happen? When Medicare collects the Part B premium from people who have MA plans, Medicare sends some or all of that premium to the private insurance company that issued the Medicare Advantage plan. MA plans will have higher costs in 2024, so you may see higher deductibles, copays, or a different menu of services offered than in 2023.

 

Part D Prescription Drug Plans

Original Medicare does not offer prescription drug coverage. That has to be purchased from private companies as a standalone plan. Premiums vary by company. This is the only Medicare category that’s expected to go down. The Centers for Medicare & Medicaid Services says the average standard Part D premium is expected to drop slightly from $56.49 per month to $55.50.

 

Keep in mind that the cost of a Part D Prescription plan can range from $6-$99 dollars a month, so shopping around is advisable.

 

Part D Income-Related Monthly Adjustment Amounts

Just like Part B, Medicare Part D premiums are also based on income and you may have to pay an Income-Related Monthly Adjustment Amount (IRMAA). The income amounts are the same as those for Part B.

  • Individuals, and married people filing separate federal income tax returns, with a modified adjusted gross income (MAGI) of up to $103,000.
  • Married couples filing joint returns with a MAGI of up to $206,000.

 

 

Disclaimer

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