Navigating Medicare Costs Changes in 2024
In 2024, Medicare costs are set to increase, following an unusual decrease in the previous year. It is crucial for beneficiaries to comprehend their out-of-pocket costs, as these vary based on income and the chosen plan. Here’s a comprehensive breakdown of what to expect in 2024.
2024 Medicare Costs Overview
Part A Premium (monthly): Premium-free with Qualifying work history; $505 each month without |
Part A Deductible and Coinsurance: You Pay: $1,632 deductible for each benefit period Days 1-60 $0 coinsurance for each benefit period Days 61-90 $408 coinsurance per day of each benefit period Days 91 and beyond $816 coinsurance per each “lifetime reserve day” after day 90 for each benefit period (up to 60 days over your lifetime) Beyond lifetime reserve days All Costs |
Part B Premium(monthly): The standard Part B premium amount is $174. 70 (high earners pay high) |
Part B Deductible and Coinsurance: $240 per year and 20% of the Medicare-approved amount |
Part A - Hospital Coverage
The Part A deductible for hospital admissions is set to increase by $32 in 2024, reaching $1,632. This deductible covers the beneficiary's share of costs for the first 60 days of Medicare-covered inpatient hospital care within a benefit period. It's important to note that there is no limit to the number of benefit periods in a year, meaning the deductible may be paid multiple times annually. For hospitalizations exceeding 60 days, the coinsurance amount is slated to rise from $400 to $408 per day for days 61 to 90 and from $800 to $816 per day thereafter. Additionally, beneficiaries in skilled nursing facilities will see an increase in the daily coinsurance for days 21 through 100 of extended care services, rising from $200 to $204.
Medicare Part B - Medical Services
In 2024, the standard monthly premium for Medicare Part B is set at $174.70, a $9.80 increase from the previous year's $164.90. The annual deductible for all Part B beneficiaries will be $240 in 2024, up by $14 from the 2023 deductible of $226. High earners will face surcharges based on adjusted gross income from two years earlier. Beneficiaries with 2022 AGI above $103,000 ($206,000 for married couples filing jointly) will pay between $244.60 and $594.00 per month for Part B. Surcharges for those with 2022 AGIs over $97,000 (or $194,000 for married couples filing jointly) range from $230.80 to $560.50. Part B covers various services, including doctor visits, outpatient care, home health care, durable medical equipment, and preventive services. Beneficiaries typically pay 20% of the Medicare-approved amount after meeting the deductible, with no yearly limit unless supplemental coverage, like Medigap, is in place.
Medicare Part D - Prescription Drug Coverage
The average premium for Part D, covering drug costs, is anticipated to be around $55.50 per month in 2024, a slight decrease from $56.49 in 2023. Upon reaching a combined spending of $5,030 on drugs, beneficiaries will pay no more than 25% of prescription drug costs until their out-of-pocket spending reaches $8,000 in 2024. The 75% discount on brand-name and generic drugs is funded by drug manufacturers (70%), insurers (5%), and the remaining 25% paid by the beneficiary.
High earners may also face surcharges for Medicare drug coverage. In 2024, individuals with incomes above $103,000 or couples with incomes exceeding $206,000 will pay an additional amount, ranging from $12.90 to $81.00. This surcharge applies even for those in Medicare Advantage Plans with drug coverage.
Medigap - Supplemental Coverage
Medicare's coverage has gaps, often referred to as the "doughnut hole." Part B only covers 80% of doctor's visits and outpatient services, leaving beneficiaries with uncovered expenses. To address this, individuals can purchase supplemental insurance, known as Medigap, or enroll in a Medicare Advantage plan.
Medigap policies, categorized from A to N, cover deductibles and copayments and are offered by private insurers. Plans with coverage for the Part B deductible, such as Plan F, are unavailable for new enrollees since 2020. However, individuals enrolled in Medicare before 2020 can still sign up for these plans.
Medicare Advantage – Alternative Coverage
Medicare Advantage plans, often referred to as “Part C” or “MA Plans,” replace Original Medicare and provide medical and prescription drug coverage through private insurance companies. In 2024, the average monthly premium for Medicare Costs is estimated to be $18.50, a slight increase from $17.86 in 2023. While Advantage plans offer lower premiums than Medigap, they may have higher deductibles and copayments, with a more limited choice of providers compared to Original Medicare.
Expert Guidance For More Information
Are you seeking help to get clarity on your healthcare coverage choices? Allow our team of experts to guide you in understanding your basic benefits, and then we can assist you in selecting the right supplemental plan. Reach out to us today!
The Medicare program comprises Part A, B, C, and D. It's important to note that Part C, D, and Medigap plans are offered by private insurance carriers, not the federal government.
You can opt for both a Medigap plan and a Part D plan, or you can choose an Advantage plan, only if you are enrolled in in Medicare Part A and Part B.
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