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Changes to 2024 Medicare coverage include projected increases for Medicare Part B and Part A premiums and cost-sharing, adjustments to income-related premium surcharges for Medicare Part B and Part D, the elimination of Medicare Part D coinsurance once an enrollee reaches the catastrophic coverage phase, and more widespread availability of the full Low-Income Subsidy (Extra Help) for Medicare Part D prescription drug coverage.
Here’s a full rundown of changes to Original Medicare cost-sharing and premiums, the high-income brackets, improvements to Medicare Part D prescription drug coverage, and more.
Starting in 2024, Medicare Part D prescription drug enrollees will no longer have out-of-pocket costs for covered drugs once they spend enough to qualify for catastrophic coverage or “catastrophic coverage level.” The catastrophic coverage level is reached when the policyholder’s true out-of-pocket — TrOOP — payments reach $8,000 in 2024.
In 2023 and previous years, enrollees paid 5% of the cost of covered drugs (or modest copays, depending on the drug cost) after reaching the catastrophic coverage level. But as a result of the Inflation Reduction Act passed by Congress in 2022, enrollees whose prescription drug spending reaches the catastrophic coverage phase will no longer have coinsurance or copays for covered drugs once they reach that point.
Medicare’s full Extra Help (Low-Income Subsidy) is expanding in 2024 to cover more people. Extra Help has both income and asset/resource limits. Rules through 2023 provide full Extra Help to those with income up to 135% of the poverty level, and partial Extra Help to those with income up to 150% of the poverty level, so long as asset limits are not exceeded.
As of 2024, due to the Inflation Reduction Act, the full Extra Help benefit will be available to beneficiaries with income up to 150% of the poverty level, as long as they meet the asset/resource limits. There will no longer be a partial Extra Help program, although individuals whose income and asset levels previously made them eligible for partial Extra Help will get the full benefit.
The standard premium for Medicare Part B decreased in 2023. But it will be $174.70/month in 2024, which will be an increase of nearly $10/month over the standard 2023 premium.
For most Medicare Part B enrollees, the premiums are automatically deducted from Social Security checks. The cost-of-living adjustment (COLA) for 2024 will increase Social Security checks by about 3.2%, which will cover the increase in Medicare Part B premiums for virtually all enrollees.
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The Medicare Part B deductible also decreased in 2023, but it’s increasing to $240 in 2024.
Some enrollees have supplemental coverage that pays their Medicare Part B deductible. This includes Medicaid, employer-sponsored plans, and Medicare Supplement (or Medigap) Plans C and F. But since the beginning of 2020, Medigap Plans C and F have no longer been available to newly eligible enrollees (this is discussed in more detail below).
Many Medicare Advantage plans have copays and deductibles that don’t necessarily increase in lockstep with the Medicare Part B deductible., So, although their benefit designs fluctuate from one year to another, the changes aren’t the same as the deductible and copay changes that apply to Original Medicare.
Medicare Advantage plans wrap Medicare Part A, Part B, sometimes Part D prescription drug, and various supplemental coverage together into one plan, with out-of-pocket costs that are different from Original Medicare. About a third of Medicare Advantage plans have a separate, additional Part B premium that enrollees in those plans must pay.
Medicare Part A covers hospitalization costs. Medicare Part A has out-of-pocket costs when enrollees need hospital care, although most enrollees do not pay a premium for Medicare Part A. But you’ll have to pay a premium for Medicare Part A if you don’t have 40 quarters of work history (or a spouse with 40 quarters of work history).
Roughly 1% of Medicare Part A enrollees pay premiums; the rest are entitled to free premiums based on their earnings history or a spouse’s. Medicare Part A premiums have trended upwards over time but they will remain fairly flat for 2024.
The Medicare Part A premium for people with more than 30 (but less than 40) quarters of work history will remain at $278/month in 2024, unchanged from 2023. For people with fewer than 30 quarters of work history, the premium for Medicare Part A will decline slightly, to $505/month in 2024, down from $506/month in 2023.
Medicare Part A has a deductible that applies to each benefit period, rather than a calendar year deductible like Medicare Part B or typical health insurance plans (a Medicare benefit period begins when a person is admitted for inpatient care, and ends when they have not received any inpatient care for at least 60 days). The deductible generally increases each year, and it will increase to $1,632 in 2024, up from $1,600 in 2023. The Medicare Part A deductible applies to all Original Medicare enrollees who receive inpatient care, although many enrollees have supplemental coverage that pays all or part of the Medicare Part A deductible.
The Medicare Part A deductible covers the enrollee’s first 60 inpatient days during a benefit period. If the person needs additional inpatient coverage during that same benefit period, there’s a daily copayment (this used to be called coinsurance, but Medicare now refers to it as a copayment). For 2024, it will be $408 per day for the 61st through 90th day of inpatient care (up from $400 per day in 2023). The copay for lifetime reserve days will be $816 per day in 2024, up from $800 per day in 2023.
Medicare covers up to 100 days in a skilled nursing facility care if the patient has an inpatient hospital stay of at least three days before being transferred to a skilled nursing facility. After day 100, all skilled nursing facility expenses are the responsibility of the beneficiary.
Although the first 20 days of a covered stay in a skilled nursing facility have no cost-sharing, there’s a copayment that applies to days 21 through 100 in a skilled nursing facility. That copayment is $204 per day in 2024, up from $200 per day in 2023.
As a result of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), Medigap Plan C and the high-deductible Medigap Plan F are no longer available for purchase by people who become newly eligible for Medicare on or after January 1, 2020.
People who became Medicare-eligible prior to 2020 can keep Medigap Plans C or F if they already have them or apply for those plans at a later date, including for 2024 coverage. (Medical underwriting applies in most states if you’re switching from one Medigap plan to another after your initial enrollment window ends, but some states have guaranteed-issue Medigap plans even after the initial enrollment period has ended.)
Medigap Plans C and F cover the Medicare Part B deductible ($226 in 2023, increasing to $240 in 2024) in full. But other Medigap plans require enrollees to pay the Medicare Part B deductible themselves. The idea behind the change is to discourage overutilization of services by ensuring that enrollees have to pay at least something when they receive outpatient care, as opposed to having all costs covered by a combination of Medicare Part B and a Medigap plan.
Because the high-deductible Medigap Plan F was discontinued for newly eligible enrollees as of 2020, there is a high-deductible Medigap Plan G available instead.
Yes. The threshold for high-income surcharges (and each of the income brackets) will increase for 2024, and the surcharges at each income level will also increase.
Medicare beneficiaries with high incomes pay more for Medicare Part B and Medicare Part D prescription drug coverage. But what exactly does “high income” mean? The high-income brackets were introduced in 2007 for Medicare Part B and in 2011 for Medicare Part D prescription drug plans, and for several years they started at an income of $85,000 ($170,000 for a married couple).
But the income brackets began to be adjusted for inflation as of 2020. For 2024, the threshold where the surcharge starts to be added will increase again, to $103,000 for a single person and $206,000 for a married couple, up from $97,000 and $194,000, respectively, in 2023. The surcharge in 2024 will be based on modified adjusted gross income reflected in 2022 tax returns, since those are the most recent tax returns on file when 2024 begins; there’s an appeals process you can use if your income has changed since then.
For 2024, the Medicare Part B premium for high-income beneficiaries will range from about $245/month to about $594/month, depending on income.(In 2023, the Medicare Part B premiums for high-income beneficiaries ranged from $230.80/month to $560.50/month in 2023).
For Medicare Part D, the 2024 high-income surcharge (added to the beneficiary’s plan-specific premium) will range from $12.90/month to $81/month, depending on income. This is also an increase from the 2023 surcharges, which ranged from $12.20/month to $76.40/month.
CMS announced that the average 2024 Medicare Advantage (Medicare Part C) premium will be $18.50/month (in addition to the cost of Medicare Part B). This is a slight increase from 2023, but still lower than 2022, when the average premium was $19.52/month. Average Medicare Advantage premiums have been declining for the last several years.
(Note that Medicare Advantage premiums are in addition to Medicare Part B premiums. People who enroll in Medicare Advantage plans pay their Medicare Part B premium and the premium for their Medicare Advantage plan, and the private insurer that provides the Medicare Advantage plan wraps all of the coverage into one plan.)
The average premiums described above are for all Medicare Advantage plans, including those that don’t have integrated Medicare Part D prescription drug coverage. And the overall average is driven down since the majority of Medicare Advantage enrollees have no premiums other than the cost of Medicare Part B (i.e., they’re in “zero premium” Medicare Advantage plans). Two-thirds of Medicare Advantage plans available for 2024 have $0 premiums, which means that their enrollees only pay the Medicare Part B premiums.
If we consider the Medicare Advantage premiums for only those plans that include Medicare Part D prescription drug coverage and that do have a premium in addition to the cost of Medicare Part B, the average premium is quite a bit higher: $57/month.
Medicare Advantage plans are required to cap enrollees’ out-of-pocket costs for Medicare Part A and Part B services (unlike Original Medicare, which does not have a cap on out-of-pocket costs). The cap does not include the cost of prescription drugs since those are covered under Medicare Part D (even when it’s integrated with a Medicare Advantage plan).
For several years, the in-network cap was $6,700 (there’s a higher limit for out-of-network costs). The cap grew to $8,300 in 2023. For 2024, the maximum out-of-pocket limit for in-network care under Medicare Advantage plans is increasing to $8,850 (plus out-of-pocket costs for prescription drugs; the maximum out-of-pocket limit only applies to services that are covered by Medicare Part A and Medicare Part B). But most Medicare Advantage plans have out-of-pocket caps well below the government’s maximum.
About 32 million people had Medicare Advantage plans in 2023. Enrollment in these plans has been steadily growing for more than 15 years, and is expected to continue to grow in 2024 and future years. The total number of Medicare beneficiaries has been steadily growing as well, but the growth in Medicare Advantage enrollment has far outpaced overall Medicare enrollment growth.
In 2007, just 19% of eligible Medicare beneficiaries had Medicare Advantage plans. That has grown to 51% by 2023 (to be eligible for Medicare Advantage, you must have Medicare Part A and Medicare Part B; 2023 was the first year when more than half of eligible enrollees had Medicare Advantage plans).
Average basic Medicare Part D prescription drug premiums are projected to be $34.50/month in 2024, up from $32.09 in 2023. But a KFF analysis of total premiums for stand-alone Part D prescription drug plans (PDPs) — including basic and supplemental (enhanced) coverage (PDF: page 2) — indicated that if enrollees keep their existing coverage for 2024, the enrollment-weighted average premium is expected to increase by 21%, to $48/month. KFF noted, however, that plan changes during open enrollment could result in an actual enrollment-weighted premium that’s lower than $48/month.
As is always the case, there will be numerous options available (although fewer options than there have been in prior years), with a wide range of premiums. On the low end of the spectrum, there are PDPs available in most states with premiums below $1/month. On the high end, there are PDPs with premiums of more than $100/month.
The maximum allowable deductible for standard Medicare Part D prescription drug coverage is $505 in 2023. This will increase to $545 in 2024.
And the out-of-pocket threshold (where catastrophic coverage begins) will increase to $8,000 in 2024, up from $7,400 in 2023 (note that this is a combination of drug manufacturer discounts and the enrollee’s costs; actual out-of-pocket costs for the enrollee will be around $3,250 when the catastrophic coverage level is reached in 2024).
As noted above, enrollees will no longer have out-of-pocket costs for covered drugs once they reach the catastrophic coverage level in 2024 as a result of the Inflation Reduction Act.
Although the ACA closed the “donut hole” as of 2020, it is still relevant in terms of how drug costs are counted towards reaching the catastrophic coverage threshold and in terms of who covers the costs of the drugs (i.e., the drug manufacturer or the enrollee’s Medicare Part D prescription drug plan). Here’s more about how that all works.
The Inflation Reduction Act will continue to ensure that Medicare Part D prescription drug enrollees can receive recommended vaccines at no cost, and covered insulin products with copays capped at $35/month. These rules took effect in 2023 and will continue to be applicable in 2024.
Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.
Today medicareresources.org released tips to help consumers avoid costly mistakes while evaluating and selecting coverage during Medicare open enrollment.
The Inflation Reduction Act – passed in August 2022 – will decrease how much Medicare enrollees have to spend on diabetes care.
Q: How will Medicare prescription drug costs change for 2023? A: There are several changes for 2023, including free vaccines under Part D, a $35 cap on monthly insulin costs, and changes to the Part D deductible and coverage thresholds.
If you shun private coverage, can you get by on Original Medicare without purchasing supplemental coverage (Medigap and Part D prescription coverage) or using a Medicare Advantage plan?
Today medicareresources.org released tips to help consumers avoid costly mistakes while evaluating and selecting coverage during Medicare open enrollment.
The Inflation Reduction Act – passed in August 2022 – will decrease how much Medicare enrollees have to spend on diabetes care.
Q: How will Medicare prescription drug costs change for 2023? A: There are several changes for 2023, including free vaccines under Part D, a $35 cap on monthly insulin costs, and changes to the Part D deductible and coverage thresholds.
If you shun private coverage, can you get by on Original Medicare without purchasing supplemental coverage (Medigap and Part D prescription coverage) or using a Medicare Advantage plan?
