Medicare Changes In 2024: What’s New?

Beginning Jan. 1, 2024, most U.S. residents enrolled in Original Medicare (Part A and Part B) or a Medicare Advantage plan must pay a standard Part B monthly premium of $174.70, an increase of $9.80 (or 5.9%) from 2023. The Part B annual deductible is also rising by $14 (or 6.2%) to $240.

Medicare beneficiaries whose income exceeds a certain amount must also pay a surcharge on their Part B premium known as an income-related monthly adjustment amount (IRMAA) ranging from $69.90 to $419.30—up from $65.90 to $395.60 in 2023. About 8% of Medicare beneficiaries are affected by IRMAA surcharges.

The annual income threshold at which the monthly adjustment kicks in is also increasing. Each year the Social Security Administration (SSA) uses data from two-year-old tax returns to assess whether a person must pay an IRMAA. For 2024, beneficiaries must pay an extra amount if their 2022 modified gross adjusted income reached $103,000 (or $206,000 if they file their taxes jointly with a spouse). The income threshold in 2023 sat at $97,000 (or $194,000 for those filing jointly). As with the Part B annual deductible, 2024’s IRMAA thresholds represent a rise of 6.2%.

What Is Medicare Part B?

Medicare Part B is one of the two main sections of Original Medicare. While Medicare Part A provides coverage for hospitalizations and some home health care and hospice expenses, Part B covers the diagnosis and treatment of health conditions, along with preventative care like flu shots and doctor checkups.

Medicare Part B also covers ambulance services, durable medical equipment, limited outpatient prescription drugs, mental health care and participation in clinical research.

The average monthly premium for a Medicare Part D prescription drug plan in 2024 is projected to dip to $55.50 from 2023’s $56.49, according to the Centers for Medicare and Medicaid Services, or CMS. The 99-cent drop is attributed to policy changes made by the Inflation Reduction Act, which was signed by President Joe Biden in 2022.

As with Part B, about 8% of people with Medicare Part D coverage must pay an IRMAA ranging from $12.90 to $81 depending on the beneficiary’s income from two years ago.

What Is Medicare Part D?

Medicare Part D is a type of optional Medicare plan that provides prescription drug coverage. All U.S. residents enrolled in Original Medicare, Original Medicare with a Medicare Supplement plan (Medigap) or a private Medicare Advantage plan that doesn’t include a prescription drug benefit are eligible to enroll in a Part D plan.

Medicare Part D plans are administered by private health insurance companies approved by Medicare. Annual deductibles, monthly premiums and drug costs vary by policy.

“You should be looking at your drug coverage because plans change every year,” says Hotton. “You should move back and forth to save money.”

Review your plan annually to check whether your medications are still listed in the formulary and how their prices may have changed.

Beginning in January 2024, Medicare Part D beneficiaries reach the catastrophic coverage level when their out-of-pocket and manufacturer-subsidized drug costs total $8,000. At that point, due to new Medicare rules, they’re no longer subject to a 5% copay. According to one Medicare analysis conducted by KFF, that change caps beneficiaries’ maximum out-of-pocket drug costs at about $3,300 for 2024. It’s projected that out-of-pocket prescription drug costs will then be capped at $2,000 a year for 2025.

Meanwhile, more Medicare beneficiaries are eligible for income assistance to help pay for their health care in 2024. People with incomes of up to 150% of the federal poverty level can qualify for the Part D low-income subsidy benefit. (The 2023 threshold was 135% of the poverty level.) The low-income subsidy program, also known as Extra Help, pays the entire cost of the Part D annual deductible and monthly premium and lower costs for both generic and brand name drugs.

What’s more, beginning in 2024, all adult vaccines covered by Medicare are available for free to beneficiaries. The cost for one month’s supply of any insulin product is also capped at $35.

Medicare is expanding access to behavioral health services in 2024 as well. For the first time, mental health counselors and marriage and family therapists are eligible to enroll as Medicare providers. The move is meant to help beneficiaries coping with depression, anxiety or substance use disorders by making more professionals available to provide care.

Medicare is also extending its coverage of intensive outpatient programs for mental health come January. In its Medicare and You 2024 Handbook, the Centers for Medicare and Medicaid Services says for these services, a beneficiary is responsible for 20% of the Medicare-approved amount along with their Part B deductible.

People with chronic pain (pain lasting at least three months) can get coverage for pain control and management beginning in 2024.

Monthly services covered by Medicare include:

• Pain assessment
• Medication management
• Care planning and coordination

Beneficiaries are responsible for paying their Part B deductible and the coinsurance for these services.

Until Dec, 31, 2024, Medicare-covered telehealth services are available. After that date, however, most telehealth appointments will be covered only if you’re in a medical facility or office in a rural location.

Some exceptions apply, including:

• Behavioral health services
• Treatment of a substance use disorder
• Diagnosis, evaluation or treatment of a mental health disorder
• Monthly end-stage renal disease visits for home dialysis

Medicare Advantage plans may provide other telehealth services, so check to see what your specific plan offers.

For the most part, this year’s Medicare changes are positive, says Hoton. “They’re trying to round out Medicare (to be) something that is providing benefits across the board for everybody.”

As you consider which Medicare coverage best suits your personal needs, be it Original Medicare, Original Medicare with a Medicare Supplement plan or a private Medicare Advantage plan, know that Medicare Advantage plans are legally required to cover everything Original Medicare covers with the exception of hospice care. With that said, some Medicare Advantage plans aren’t available in every state, so focus on ones that are offered where you live.

To help you navigate your enrollment options, Hotton suggests contacting your local Senior Health Insurance Assistance Program, or SHIP, at shiphelp.org. This free government-funded service is available in every state and Washington, D.C., as well as Guam, Puerto Rico and the U.S. Virgin Islands. You can also ask a family member or friend to step in and help you enroll directly via Medicare.gov.

References

• 2024 Medicare Parts A & B Premiums and Deductibles. Centers for Medicare and Medicaid Services. Accessed 11/7/2023.
• 2023 Medicare Parts A & B Premiums and Deductibles 2023 Medicare Part D Income-Related Monthly Adjustment Amounts. Centers for Medicare and Medicaid Services. Accessed 11/7/2023.
• Medicare Annual Verification Notices: Frequently Asked Questions. Social Security Administration. Accessed 11/7/2023.
• CMS Releases 2024 Projected Medicare Part D Premium and Bid Information. Centers for Medicare and Medicaid Services. Accessed 11/7/2023.
• Monthly premium for drug plans. Medicare.gov. Accessed 11/7/2023.
• Changes to Medicare Part D in 2024 and 2025 Under the Inflation Reduction Act and How Enrollees Will Benefit. KFF. Accessed 11/7/2023.
• An Overview of the Medicare Part D Prescription Drug Benefit. KFF. Accessed 11/7/2023.
• Medicare and You Handbook 2024. Medicare.gov. Accessed 11/7/2023.
• Regional SHIP Location. Senior Health Insurance Assistance Program. Accessed 11/7/2023.