Major Medicare Changes in 2024: Prepare for Increased Healthcare Costs

By Doug Young – 12 December 2023

Introduction

Millions of people on Medicare will face significant changes to their healthcare costs starting in 2024. These changes, particularly in prescription drug plans and out-of-pocket expenses, will have a substantial impact on individuals’ personal finances.

It is crucial for Medicare beneficiaries to understand these changes and be prepared for the upcoming shifts in the healthcare landscape.

Changes to Prescription Drug Plans

Prescription drug plans, also known as Part D plans, are a vital component of Medicare coverage.

There are two primary ways individuals can obtain Part D coverage: through standalone drug plans or through Medicare Advantage plans (also known as Part C plans).

Standalone drug plans are chosen by individuals who prefer to stay in original Medicare (Parts A and B) and get a supplemental plan to fill the gaps.

Medicare Advantage plans integrate Part D coverage into their comprehensive health plans.

In 2024, significant changes will impact prescription drug plans, particularly regarding out-of-pocket costs.

Individuals will experience changes in the four phases of prescription drug plans: deductible, co-pay, coverage gap, and catastrophic phase. Deductibles are set to increase, and thresholds for each phase will change.

It is essential for beneficiaries to be aware of these changes and how they may affect their out-of-pocket expenses throughout the year.

Financial Assistance

The year 2024 will bring expanded eligibility and benefits for financial assistance programs, including the Extra Help program for Part D plans and the Medicare Savings Program for Part B expenses.

These programs provide valuable financial support, estimated at an average value of $5,300 per year for qualified individuals.

To qualify for these programs, individuals need to meet certain income and resource thresholds.

Income includes Social Security benefits, pensions, annuity income, and more.

Resources encompass assets such as real estate, bank accounts, stocks, and bonds.

Applying for financial assistance can be done through Social Security or State Medicaid agencies. It is crucial to apply and undergo an annual review to maintain eligibility and ensure continued access to financial assistance.

Medicare Premium Changes

Medicare premiums for Parts A and B will also undergo changes in 2024.

Most individuals receive premium-free Medicare Part A if they have paid Medicare taxes for 40 quarters. However, the quarterly amount required to earn a quarter for Medicare Part A will increase.

Medicare Part B premiums are income-based, meaning they vary depending on an individual’s modified adjusted gross income (MAGI). Those with MAGI below certain thresholds will pay the standard base premium, while those above the thresholds will pay additional amounts known as Income-Related Monthly Adjusted Amounts (IRMAA).

The IRMAA levels are determined by income levels and can affect both Part B and Part D premiums. However, individuals experiencing life-changing events that significantly impact their income can appeal the IRMAA and potentially reduce or eliminate the additional premiums.

Conclusion

As the year 2024 approaches, Medicare beneficiaries must be prepared for the major changes that lie ahead. Understanding the alterations in prescription drug plans, financial assistance programs, and premium structures is crucial to effectively manage healthcare costs.

It is advisable to stay informed, conduct additional research, and seek professional guidance to navigate the intricacies of the Medicare system and make informed decisions regarding coverage and financial assistance options.

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