Medicare Updates 2024: Cost Increases and Lower Plan Ratings

With each passing year, Medicare experiences shifts and updates in its structure and costs. For beneficiaries, staying informed on these changes is beneficial to maximize their Medicare benefits. As 2024 rolls in, several key changes are on the horizon for Medicare parts A, B, D, and the Medicare Advantage plans.

Part A Costs: A Mixed Bag

Medicare Part A, which covers hospital and skilled nursing facility care, presents a varied cost picture for 2024. Most beneficiaries will not see a change in their premium, retaining the free Part A coverage that comes from having worked the requisite quarters. However, for those who need to purchase Part A coverage, the premiums remain similar to the previous year, costing either $278 or $505 monthly, showing a minor decrease from 2023's high of $506 for the upper tier.

Conversely, the inpatient hospital deductible will see an increase from $1,600 to $1,632. Beneficiaries should note that this deductible is per benefit period, not an annual fee. A new benefit period begins following 60 consecutive days without hospital or skilled nursing facility care. With Medigap plans potentially covering this deductible, it is important to review policy details.

For hospital stays beyond the 60-day coverage or skilled nursing facility stays beyond 20 days post-deductible, copayments will experience a slight uptick. Hospital stays from day 61 to 90 will cost $408 per day, a rise from $400, while lifetime reserve days in hospital will cost $816 per day, up from $800. Similarly, days 21 to 100 in a skilled nursing facility will now cost $204 daily, an increase from $200.

Part B Premiums and Deductibles Climb

Medicare Part B, which handles the cost of visits to medical providers and services such as ambulance rides and durable medical equipment, will also see cost increases. Premiums are set to rise to $174.70 per month, a notable bump from the previous year's $164.90. The annual Part B deductible will increase as well, reaching $240 in 2024 compared to $226 in 2023.

Declining Ratings for Medicare Advantage Plans

The average star ratings for Medicare Advantage plans are declining, with 2024 seeing an average of 4.04 compared to 2023's 4.14. Notably, approximately 74% of enrollees will remain in plans rated at 4 stars or higher, which is consistent with the prior year's statistic. These lowered ratings have been attributed to methodological changes within the Centers for Medicare & Medicaid Services (CMS).

Significant Changes in Part D Prescription Drug Coverage

One of the most impactful adjustments coming to Medicare in 2024 is within Part D, which involves prescription drug coverage. The year 2024 will eliminate the 'catastrophic' drug cost coinsurance after reaching the spending limit of $8,000. Previously, enrollees would have to pay up to 5% of their drug costs, which could become quite expensive depending on the drugs required. Now, beneficiaries can look forward to a cap on their prescription drug expenses.

Extra Help Program Expansion

Another significant change in 2024 comes with the expansion of eligibility for the Extra Help program due to the Inflation Reduction Act. This program assists those with limited resources in managing their prescription drug plan costs such as premiums, deductibles, and copays. Those with incomes at or below 150% of the federal poverty level will be eligible for more benefits, translating into considerable savings. Awareness of this program and the Medicare Savings Programs, which assists with costs for Parts A and B, remains critical for beneficiaries to take advantage of the available support.

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