Standard Medicare Part B Premium Set to Rise 5.9% in 2024

Some of your older clients who may have thought that “Medicare is free” will be paying $594 per month for their Medicare Part B physician and hospital services coverage in 2024.

The Centers for Medicare and Medicaid Services — the arm of the U.S. Department of Health and Human Services that runs Medicare — announced Thursday that the standard Medicare Part B premium will increase 5.9% for 2024 coverage, to $174.70 per month.

The compares with a Social Security cost-of-living adjustment of just 3.2%. For the average retiree, that’s a raise of $59 a month, to $1,907.

The gap between the COLA and the Medicare Part B premium increase may catch clients’ attention, because many clients enrolled in Medicare have the premiums deducted from their Social Security checks.

The Medicare plan annual enrollment period starts Sunday and runs through Dec. 7.

What it means: The Medicare rate changes might not have much impact on the finances of a typical retirement advisor’s clients, but news of the changes can be a way to help clients think about inflation.

Other Medicare charge changes: The annual Medicare Part B deductible will increase 6.2%, to $240 per month.

The maximum Medicare Part D prescription drug coverage adjustment, for high-income enrollees, will increase 6%, to $81 per month.

The full premium for Medicare Part A hospitalization coverage — which could affect clients who bring their elderly parents to the United States from other countries — will fall 0.2%, to $505 per month.

Clients are much more likely to pay the Medicare Part A deductible. The Part A deductible will increase 2%, to $1,636 for the year.

For more Medicare cost change details, see the tables below.

The program: Medicare is a federal program that provides health coverage for 66 million U.S. residents, including people ages 65 and older, some people with disabilities and some people with kidney disease serious enough to require either dialysis or a kidney transplant.

Because of the nature of the legislation Congress used to create Medicare, the program has three major separate parts: Medicare Part A hospitalization coverage, Medicare Part B physician and outpatient services coverage and Medicare Part D prescription drug coverage.

Consumers and federal subsidies pay for Medicare Part B and Medicare Part D coverage.

Program managers use payroll tax revenue to pay for the Medicare Part A hospitalization program.

Managers classify most Part A program enrollees as having already paid for their coverage in full.

The only enrollees who pay Part A premiums are those who lack enough of the right kind of work experience in the United States.

High-income enrollees: Originally, Medicare designers wanted the program to provide equal coverage for all Americans, including wealthy people, to ensure that the program would have the broadest possible support.

Over the years, Congress has responded to concerns about program finances by adding adjustments aimed at high earners.

For the Medicare Part B program, for example, managers impose an income-related monthly adjustment amount, or IRMAA.

Congress has set income category limits for Medicare programs, and Medicare program managers adjust the limits each year.

For 2024, for example, the upper limit on annual income for the lowest income category for individual filers, who pay no IRMAA, will be $103,000, up 6.2% from 2023 limit.

The lower limit for married joint filers in the highest-income category will be $750,000, which is the same as in 2023.

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The Centers for Medicare and Medicaid Services offices in Woodlawn, Maryland. Credit: Jay Mallin/Bloomberg