Health care premiums will rise next year for the nearly 66 million Americans enrolled in the government’s Medicare program, according to the Centers for Medicare & Medicaid Services.
The standard monthly cost of Medicare Part B, which most seniors and disabled people have to cover certain doctors’ services, outpatient care, medical supplies, and preventive services, will increase by $9.80, or 6%, to $174.70 from $164.90 in 2023. The annual deductible for Medicare Part B beneficiaries will rise $14 to $240 in 2024, from $226 this year.
The premium increase in Medicare Part B is in line with the estimates by the Medicare Trustees earlier this year but lower than what some experts had estimated.
“We are relieved to learn that the Medicare Part B increase in 2024 won’t be as high as we initially feared,” said Mary Johnson, Social Security and Medicare policy analyst at the nonprofit advocate The Senior Citizens League. In September, The Senior Citizens League forecasted the Medicare Part B increase might rise as much as $5 per month more than the Trustees estimated, after CMS approved a pricey new Alzheimer’s drug, Leqembi.
Why are Medicare premiums going up?
The increase in standard Medicare Part B premiums for 2024 comes off a $5.20 monthly decline in 2023 from 2022. CMS had cut the fee after lower-than-projected spending on both the controversial Alzheimer’s drug Aduhelm and other Part B items and services.
For 2024, though, Medicare Part B and the deductible are rising because of projected increases in health care spending that are driving prices higher and, to a lesser degree, having to repay providers for underpayment from 2018 to 2022.
How much does Medicare cost in 2024?
Although Medicare Part B will generally cost $174.70 monthly in 2024, about 8% of Medicare Part B beneficiaries with higher incomes will pay more, CMS said. For example, someone with gross income between $103,000 and $129,000 will pay $244.60 a month for Part B instead of the standard $174.70. On the highest end, someone whose income is at least a half million dollars will pay $584 monthly.
While most Medicare enrollees have worked so long they don’t pay a monthly premium for Part A – which covers inpatient hospital, skilled nursing facility, hospice and some home health care services – their deductible for each hospital stay is rising $32 next year to $1,632 per stay.
For people who haven’t worked long enough to qualify for premium-free Part A, the monthly Part A premium will be $505, down $1 from 2023.
Do you pay Medicare out of your Social Security check?
Yes, if you receive Social Security, your Medicare Part B premium is automatically deducted from your check each month. That means many Social Security recipients will never feel the full effect of the Social Security cost of living adjustment, or COLA, next year.
Increased Medicare payments will take a bite out of next year’s 3.2% COLA, which was announced Thursday. In August, the average monthly check for Social Security beneficiaries was $1,705.79, according to the Social Security Administration. A 3.2% COLA would mean about an extra $54.58 each month, with $14 deducted from that to pay for the higher Medicare Part B premium.
If you are enrolled in Part B but not yet collecting Social Security, you’ll be billed quarterly by Medicare. You can pay electronically or by mail.
People with low incomes and limited financial assets may qualify for Medicare Savings Programs to help with Part B and Part A premiums. These are federally funded but run by the states.
Time for a change? Medicare open enrollment for 2024 is coming soon. Here’s when it is and how to prepare.
Who are the primary beneficiaries of Medicare?
Medicare beneficiaries include roughly 57 million older adults and nearly 8 million younger adults with disabilities, according to nonprofit KFF, which researches health policy.
What is the difference between Medicare and Medicaid?
Medicare is a federal health insurance program for people at least 65 years old and younger people with disabilities or certain chronic health conditions, such as end-stage renal disease or amyotrophic lateral sclerosis (ALS). Generally, Part A serves as hospital insurance and Part B provides coverage for outpatient services.
Medicaid is a federal program administered on the state level that provides health care coverage for low-income families, children, pregnant people, older adults, and people with disabilities.
Medora Lee is a money, markets, and personal finance reporter at USA TODAY. You can reach her at [email protected] and subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday through Friday morning.
This article originally appeared on USA TODAY: Cost of Medicare Part B premiums is going up: What you’ll pay in 2024
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