2024 Medicare Update

Recently, the Centers for Medicare and Medicaid Services (CMS) announced the new rates and figures for 2024 Medicare benefits, including premiums, deductibles, and cost-sharing amounts for Parts A and B. This update also provides details about IRMAA, the Income-Related Monthly Adjustment Amount which affects higher-income beneficiaries.

2024 Medicare Part A Changes

Part A is primarily for hospital stays and skilled nursing care.

For the majority of beneficiaries, Medicare Part A remains premium-free. If you've contributed through taxes for a total of 40 quarters or are married to someone who has, there's no Part A premium. These criteria are met by approximately 99% of enrollees.

However, for those without the 40-quarter credit, a monthly premium based on their tax contribution history is required. In 2024, these rates are:

• 30 quarters or more: $278/month

• Below 30 quarters: $505/month

Compared to 2023, the $278 rate remains unchanged, while the $505 premium saw a marginal $1 reduction.

There's a deductible for Part A based on a benefit period, which starts when admitted as an inpatient and concludes after 60 consecutive hospital-free days. For 2024, this deductible is $1,632, marking a $32 rise from the previous year.

Cost-sharing for Part A kicks in on the 61st day of a hospital stay. Days 61-90 cost beneficiaries $408 each day, a rise of $8 from 2023. From day 91 onwards, any of the 60 lifetime reserve days can be used at $816 per day (an increase of $16). Skilled nursing care coinsurance differs: after the initial 20 days covered by Part A, days 21-100 cost $204 daily, marking a $4 hike from the previous year.

2024 Medicare Part B Changes

Medicare Part B encompasses services like doctor consultations, surgeries, tests, medical equipment, preventive services, and others.

Contrary to Part A, nearly all beneficiaries have to pay a Part B premium. The standard 2024 premium is set at $174.40, up by $9.80 from 2023. The yearly deductible also saw a rise to $240, an increase from 2023's $226.

This escalation largely stems from anticipated healthcare expenditure and costs.

Certain individuals can continue their Medicare Part B enrollment for immunosuppressive medication, with a 2024 premium of $103 monthly.

Adjustments were also made to Part B IRMAA rates. To reiterate, IRMAA affects roughly 8% of beneficiaries with higher incomes. The 2024 Part B IRMAA figures will be determined by 2022's adjusted gross income and tax filing status.

2024 Medicare Part D Changes

Medicare Part D gives prescription medication coverage. There isn't a singular Part D plan or set premium. Instead, beneficiaries match their medication needs with local plan offerings. Premiums differ based on the chosen plan.

Part D is also influenced by IRMAA, albeit the additional costs are less than those for Part B. IRMAA for Part D is paid directly to Medicare, not to the insurance provider of the Part D plan.

For 2024, the default Part D deductible is $545, a rise from $505 in the preceding year. Insurance providers can opt for this or a lesser deductible.

Moreover, the initial coverage threshold has been raised to $5,030 for 2025, a jump from 2023's $4,660. Reaching this limit places beneficiaries in the coverage gap, or "donut hole," leading to higher prescription costs. Once expenses reach $8,000 in 2024 (an increase from 2023's $7,400), the catastrophic coverage phase starts. From 2024 onwards, beneficiaries will have no additional cost-sharing upon reaching this phase.