In 2024, nearly 66 million Americans enrolled in Medicare will experience higher healthcare premiums. The Centers for Medicare & Medicaid Services has announced that the standard monthly cost of Medicare Part B will increase by $9.80, or 6%, bringing it to $174.70. This part of Medicare covers doctors’ services, outpatient care, medical supplies, and preventive services essential for seniors and disabled individuals.
Why the Increase?
The hike in Medicare Part B premiums for 2024 follows a $5.20 monthly decrease in 2023. This reduction was due to lower-than-expected spending on the Alzheimer’s drug Aduhelm and other Part B items. However, the 2024 increase is attributed to projected rises in healthcare spending and the need to repay providers for underpayments from 2018 to 2022.
Impact on High-Income Beneficiaries
Approximately 8% of Medicare Part B beneficiaries with higher incomes will pay more than the standard $174.70. For instance, individuals with a gross income between $103,000 and $129,000 will pay $244.60 a month. On the other end of the spectrum, those with an income of at least half a million dollars will pay a monthly premium of $584.
Medicare Costs in 2024: A Comprehensive Look
While most Medicare enrollees qualify for premium-free Part A, which covers inpatient hospital and other services, the deductible for each hospital stay will increase by $32 to $1,632. For those who haven’t worked long enough to qualify for premium-free Part A, the monthly premium will be $505, a $1 decrease from 2023.
How Social Security and Medicare Intersect
For retirees receiving Social Security, the Medicare Part B premium is automatically deducted from the monthly check. The 3.2% Social Security cost of living adjustment (COLA) for next year will be partially offset by the increased Medicare payments. For example, a 3.2% COLA on an average monthly check of $1,705.79 would result in an extra $54.58, with $14 being deducted for the higher Medicare Part B premium.
Assistance for Low-Income Individuals
People with low incomes and limited financial assets may qualify for Medicare Savings Programs, which can assist with Part B and Part A premiums. These programs are federally funded but administered by individual states.
Medicare Open Enrollment: Time to Reevaluate
Medicare open enrollment for 2024 allows beneficiaries to reassess their healthcare needs and make necessary changes.
Medicare vs. Medicaid: Know the Difference
Medicare is a federal health insurance program catering to individuals aged 65 and above and younger people with disabilities. Medicaid, on the other hand, is a state-administered program providing health care coverage for low-income families and individuals.
Final Thoughts for Retirees
For retirees, understanding these changes is crucial for financial planning. Staying informed and reassessing your healthcare needs during open enrollment can ensure that you make the most out of your Medicare benefits.