Health care already accounts for about 13% of spending by the typical household headed by a senior. And 2024 will bring more bad news for the pocketbooks of people on Medicare.
All premiums and deductibles for folks with traditional Medicare health insurance will increase for the new year, the federal government recently announced.
Medicare Advantage premiums also are expected to increase a bit, on average. Only Medicare Part D premiums are projected to decrease.
Following is a breakdown of how these costs and related ones will change in 2024.
Medicare Part B costs
Part B is the component of Medicare that typically covers outpatient care, such as physician services, outpatient hospital services and durable medical equipment.
Its rising costs are the:
- 2024 Medicare Part B standard premium: $174.70 per month, an increase of $9.80 from $164.90 in 2023. That compares with a decrease of $5.20 per month the prior year.
- 2024 Medicare Part B deductible: $240 per year, an increase of $14 from $226 in 2023. That compares with a decrease of $7 the prior year.
For many people on Medicare, their Part B premium is deducted automatically from their monthly Social Security payment.
This means the increased Part B premium for 2024 will effectively cancel out part of their 2024 Social Security cost-of-living adjustment (COLA).
This stems in part from how these amounts are determined: Social Security COLAs are tied to inflation, while Medicare premiums are tied to the Medicare program’s per-person cost, which often outpaces inflation.
In fact, 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.
The Social Security COLA for 2024 will be 3.2% — considerably less than the 2023 COLA.
Part B Income-Related Monthly Adjustment Amounts
Medicare Part B premiums are based on income. In 2024, the standard monthly premium listed above applies only 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 joint returns with a MAGI of up to $206,000 (compared with $194,000 in 2023)
Folks with incomes above those thresholds — about 8% of people with Part B — pay higher premiums, which will range from $244.60 to $594.00 per month in 2024 (compared with $230.80 to $560.50 per month in 2023), depending on income and federal tax-filing status. This is because what’s known as an Income-Related Monthly Adjustment Amount, or IRMAA, is tacked on to their Part B premium.
For a breakdown of all Part B IRMAAs for 2024, see the two charts titled “Full Part B Coverage” in the Oct. 12 announcement from the Centers for Medicare & Medicaid Services.
Medicare Part A costs
Medicare Part A typically covers inpatient care, such as inpatient hospital services as well as skilled nursing facility services.
About 99% of Medicare beneficiaries don’t have to pay a premium for their Part A coverage due to how long they worked and therefore had Medicare taxes withheld from their paychecks. They might face other Part A costs in certain situations, however.
These costs can include the following, all of which are set to tick upward, as they typically do each year:
- 2024 Medicare Part A inpatient deductible (for the first 60 days of a hospitalization in a benefit period): $1,632, up from $1,600 in 2023
- 2024 Medicare Part A coinsurance (for the 61st through 90th day of a hospitalization in a benefit period): $408 per day, up from $400 in 2023
- 2024 Medicare Part A coinsurance for lifetime reserve days: $816 per day, up from $800 in 2023
- 2024 Medicare Part A skilled nursing facility coinsurance: $204 per day, up from $200 in 2023
Medicare Advantage and Part D premiums
Original Medicare and Medicare Advantage are the two main types of Medicare.
Original Medicare is the traditional Medicare program offered directly by the federal government that includes Medicare Part A and Part B. Folks with Original Medicare also have the option of buying a standalone Medicare Part D plan, which covers prescription drugs, from a private insurance company.
Medicare Advantage plans are an all-in-one alternative to the traditional program and are offered by private insurance companies that contract with the federal government. Folks with Medicare Advantage generally cannot buy separate Part D plans, but the vast majority of these plans include prescription coverage.
Because Medicare Advantage and Part D plans are offered by private insurers, their costs, including any premiums and deductibles, vary by plan and insurer.
On average, though, Medicare Advantage premiums are projected to be $18.50 per month in 2024, up from $17.86 in 2023, according to the Centers for Medicare & Medicaid Services.
The average standard Part D premium is expected to be $55.50 per month in 2024, down from $56.49 in 2023.
Part D Income-Related Monthly Adjustment Amounts
Medicare Part D premiums are based on income. For 2024, taxpayers with the following incomes — which is roughly 8% of people with Part D — will pay more:
- 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 joint returns with a MAGI of up to $206,000 (compared with $194,000 in 2023)
Specifically, folks with incomes in these ranges will pay an Income-Related Monthly Adjustment Amount (IRMAA) in addition to the standard Part D premium. For 2024, these additional amounts will range from $12.90 to $81 per month (compared with $12.20 to $76.40 in 2023), depending on income and federal tax-filing status.
For a breakdown of all Part D IRMAAs for 2024, see the last two charts in the Oct. 12 announcement from the Centers for Medicare & Medicaid Services.
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