Compliance News | October 18, 2023
The Centers for Medicare & Medicaid Services (CMS) recently released the Medicare Part B premiums and deductible and the Part A deductible and coinsurance that will take effect on January 1, 2024. The standard Part B premium will increase by nearly 6 percent and the Part B deductible for all Medicare beneficiaries will increase by just over 6 percent. The Medicare Part A inpatient deductible and coinsurance for hospital stays and care in a skilled nursing facility will increase by 2 percent.
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Sponsors of group health plans that cover retirees need to know this information when reviewing their coverage for Medicare-eligible retirees, including those enrolled in Medicare Advantage Plans.
Part B covers physician services, outpatient hospital services, certain home health services, durable medical equipment and other items. According to the October 12, 2023 announcement, the standard monthly Part B premium will be $174.70, an increase of $9.80. In 2024, the annual deductible for Medicare Part B beneficiaries will be $240 in 2024, an increase of $14.
| 2023 | 2024 | |
| Standard monthly Part B premium | $164.90 | $174.70 |
| Medicare Part B deductible | $226.00 | $240.00 |
Since 2007, high-income Medicare-eligible individuals who enroll in the Part B program have been required to pay a monthly Part B premium that is higher than the standard premium on a sliding scale. The Part B premium for high-income Medicare-eligible individuals varies depending upon an enrollee’s modified adjusted gross income and income tax filing status. The income-adjusted premiums for 2024 are shown in the table below.
The last column of the table shows the 2024 income-related monthly adjustments for the Part D premium. Those adjustments began in 2011. The ACA requires Part D enrollees whose incomes exceed the thresholds established for Part B to pay their regular Part D premium to their plan (that amount will vary based on the plan they choose) and also pay an income-related adjustment to Medicare.
Beginning in 2024, the Inflation Reduction Act IRA limits the annual increase in the base Part D premium to 6 percent. (Get our chart on the Inflation Reduction Act’s Implications for Medicare Part D.) CMS projects the average base monthly premium for standard Part D coverage will be $34.50 for 2024, up from $32.09 in 2023. CMS notes, “Without premium stabilization, the 2024 base beneficiary premium would have been $39.35, or $4.65 higher.”
| Income Ranges for Individual Return Tax Filing Status* | Income Ranges for Joint Return Tax Filing Status | Monthly Adjustment Amounts for Part B Premium | Total Monthly Part B Premium | Part D Premium Monthly Adjustment Amounts |
| $103,001 to $129,000 | $206,001 to $258,000 | $69.90 | $244.60 | $12.90 |
| $129,001 to $161,000 | $258,001 to $322,000 | $174.70 | $349.40 | $33.30 |
| $161,001 to $193,000 | $322,001 to $386,000 | $279.50 | $454.20 | $53.80 |
| $193,001 to $499,999 | $386,001 to $749,999 | $384.30 | $559.00 | $74.20 |
| $500,000* | $750,000+* | $419.30 | $594.00 | $81.00 |
* Married beneficiaries with income of more than $103,000 but less than $397,000 who file a separate return from their spouse and lived with their spouse at some time during the taxable year must pay the following Part B monthly premium adjustment in 2024: $384.30 (resulting in a total monthly premium of $559.00). (The Part D monthly adjustment for these couples will be $74.20.) Married beneficiaries with income of more $397,000 who file a separate return from their spouse and lived with their spouse at some time during the taxable year must pay the following Part B monthly premium adjustment in 2024: $419.30 (resulting in a total monthly premium of $594.00). (The Part D monthly adjustment for these couples will be $81.00.)
Medicare enrollees who receive a kidney transplant lose eligibility for full Medicare coverage after 36 months. They can elect to pay a premium to continue Part B coverage of only immunosuppressive drugs. In 2024, the immunosuppressive drug premium will be at least $103.00 per month. High-income beneficiaries will pay a higher premium for this coverage, as shown in the following table.
| Income Ranges for Individual Return Tax Filing Status* | Income Ranges for Joint Return Tax Filing Status | Monthly Adjustment Amounts | Total Monthly Premium |
| $103,001 to $129,000 | $206,001 to $258,000 | $68.70 | $171.70 |
| $129,001 to $161,000 | $258,001 to $322,000 | $171.70 | $274.70 |
| $161,001 to $193,000 | $322,001 to $386,000 | $274.70 | $377.70 |
| $193,001 to $499,999 | $386,001 to $749,999 | $377.70 | $480.70 |
| $500,000* | $750,000+* | $412.10 | $515.10 |
Part A pays for inpatient hospital, skilled nursing facility, hospice and certain home healthcare services.
| 2023 | 2024 | |
| First-day Part A hospital deductible | $1,600.00 | $1,632.00 |
| Daily Part A coinsurance for the 61st through 90th day of a hospital stay* | $400.00 | $408.00 |
| Daily Part A coinsurance for hospital stays longer than 90 days | $800.00 | $816.00 |
| Daily Part A coinsurance for the 21st through 100th day in a skilled nursing facility | $200.00 | $204.00 |
* There is no cost-sharing requirement for the second through 60th day of a hospital stay.
Many public plans and employers have current and future retirees that do not have, or will not qualify for, zero-premium Part A coverage. Alternative market opportunities and strategies exist to provide benefits to these retirees in a more effective manner.
Plan sponsors that reimburse Medicare-eligible retirees for Part B premium costs will likely want to revisit their payment policies to ensure that they accurately reflect the new premiums.
Plan sponsors should ensure that if they reimburse retirees for Part B costs, they do so in a clear manner that states the reimbursable amount, and do not merely state that Medicare premiums will be reimbursed.
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