Medicare Part B covers doctors’ visits, outpatient services, preventive care, and some medical equipment. If you are enrolled in Medicare Part B, you may be wondering how much you will have to pay for your monthly premium and annual deductible in 2024. In this article, we will explain when and how the Medicare Part B premiums and deductibles are determined, and what factors may affect them.
How Are Medicare Part B Premiums and Deductibles Determined?
The Centers for Medicare and Medicaid Services (CMS) is the federal agency that administers Medicare. CMS typically announces the Medicare Part B premiums and deductibles for the next year sometime between mid-October and early November. The exact amount of the premium and deductible increase won’t be known until that announcement comes¹.
The Medicare Part B premium and deductible are based on several factors, including:
- The projected cost of health care services and supplies covered by Part B
- The projected number of Part B enrollees and their income levels
- The projected amount of Part B trust fund reserves
- The statutory formulas and rules set by Congress
The standard monthly premium for Medicare Part B enrollees is calculated by dividing the estimated total cost of Part B for the year by the estimated number of beneficiaries who will pay the standard premium. The standard premium is then adjusted by a factor that reflects the difference between the actual and projected Part B costs in previous years. The standard premium also includes a contingency margin to account for any uncertainty in the estimates².
The annual deductible for Medicare Part B is the amount that beneficiaries have to pay out of pocket before Part B starts to pay for covered services. The deductible is determined by a formula that takes into account the projected per capita increase in Part B expenditures and the annual percentage increase in the Consumer Price Index for all urban consumers (CPI-U)².
What Are the Current and Expected Medicare Part B Premiums and Deductibles?
The current standard monthly premium for Medicare Part B enrollees is $164.90 in 2023. The annual deductible for all Medicare Part B beneficiaries is $226 in 2023³.
According to CMS, the standard monthly premium for Medicare Part B enrollees will be $174.70 for 2024, an increase of $9.80 (or 5.9%) from 2023. The annual deductible for all Medicare Part B beneficiaries will be $240 in 2024, an increase of $14 (or 6.2%) from 2023³.
The increase in the 2024 Part B premium and deductible is mainly due to projected increases in health care spending and, to a lesser degree, the remedy for the 340B-acquired drug payment policy for the 2018-2022 period under the Hospital Outpatient Prospective Payment System³.
Who Pays More Than the Standard Medicare Part B Premium?
Not everyone pays the same amount for Medicare Part B. Some people may pay more or less than the standard premium, depending on their situation. Here are some examples:
- People who have higher incomes may pay more than the standard premium. This is called the income-related monthly adjustment amount (IRMAA). The IRMAA affects about 8% of Part B enrollees and is based on the modified adjusted gross income (MAGI) reported on their tax returns from two years ago. For 2024, the IRMAA ranges from $12.40 to $386.10 per month, depending on the income bracket³.
- People who are new to Medicare or who do not receive Social Security benefits may pay less than the standard premium. This is because the Social Security Act prohibits the standard premium from increasing more than the cost-of-living adjustment (COLA) for Social Security benefits in a given year. For 2024, the COLA is 5.9%, which is lower than the 5.9% increase in the standard premium. Therefore, the hold-harmless provision applies to about 70% of Part B enrollees who will pay $169.10 per month, which is the standard premium adjusted by the COLA³.
- People who have certain types of insurance coverage may pay less than the standard premium. For example, people who are eligible for both Medicare and Medicaid (dual eligibles) have their Part B premium paid by their state Medicaid program. People who qualify for the Medicare Savings Programs (MSPs) have their Part B premium paid by their state Medicare program. People who have employer-sponsored retiree health plans or other group health plans may have their Part B premium subsidized by their plan⁴.
How Can You Find Out Your Medicare Part B Premium and Deductible for 2024?
Once CMS announces the Medicare Part B premiums and deductibles for 2024, you can find out how much you will have to pay by checking your Medicare account online, calling 1-800-MEDICARE, or contacting your local Social Security office. You can also use online tools such as the Medicare Plan Finder or the [Medicare Premium Calculator] to compare different Medicare options and costs.
If you have any questions or concerns about your Medicare Part B premium and deductible, you can get help from various sources, such as:
- Your State Health Insurance Assistance Program (SHIP), which provides free, unbiased counseling and assistance to Medicare beneficiaries and their families. You can find your local SHIP by visiting [www.shiptacenter.org] or calling 1-877-839-2675.
- Your local Area Agency on Aging (AAA), which provides information and referrals to community resources and services for older adults and their caregivers. You can find your local AAA by visiting [www.eldercare.gov] or calling 1-800-677-1116.
- A licensed insurance agent or broker, who can help you compare and enroll in Medicare plans that suit your needs and budget. You can find a licensed agent or broker by visiting [www.medicare.gov] or calling 1-800-MEDICARE.
Conclusion
Medicare Part B premiums and deductibles are expected to increase in 2024, reflecting the rising cost of health care and other factors. However, the amount you will have to pay may vary depending on your income, enrollment status, and other coverage. You can find out your exact Part B premium and deductible for 2024 once CMS makes the official announcement, and you can explore different Medicare options and costs using online tools or getting help from various sources. By staying informed and planning ahead, you can make the best decisions for your health and finances.
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Source:
2024 Medicare Parts A & B Premiums and Deductibles | CMS. https://www.cms.gov/newsroom/fact-sheets/2024-medicare-parts-b-premiums-and-deductibles
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