Medicare isn’t free. In fact, the average senior could spend approximately $157,500 on healthcare costs during retirement, based on estimates from Fidelity. To assist Medicare clients in making wise enrollment decisions, it is important to explain how Medicare costs work to help them budget and plan accordingly. Here’s a look at the new Medicare costs for 2024.
Medicare ABCD Pricing
Medicare consists of different parts (A, B, C and D), and each part has different costs. These costs can include premiums that need to be paid monthly to buy coverage, deductibles that need to be paid before the beneficiary receives coverage, and copays or coinsurance costs that the beneficiary needs to pay when receiving care or prescriptions.
Medicare Part A Costs
Medicare Part A provides hospital coverage. Most people who are enrolled in Medicare receive premium-free Medicare Part A coverage based on their or their spouse’s Medicare-covered employment history. However, people who do not qualify for premium-free Medicare Part A can pay $505 a month to purchase coverage in 2024.
Either way, Medicare enrollees are responsible for copays and deductibles if they are admitted to the hospital.
- For the first 60 days in the hospital, they pay $1,632, and Medicare pays the rest.
- For days 61 to 90, they pay $408 a day, and Medicare pays the rest.
- For days 91 to 150, they pay $816 a day, and Medicare pays the rest.
- For additional days, they pay the full costs, and Medicare does not pay anything.
If enrollees qualify for Medicare-covered nursing home care, they pay nothing for the first 20 days. However, they pay $204 a day for days 21 to 100, and they are responsible for 100% of the costs for any additional days.
Medicare Part B Costs
Medicare Part B provides medical coverage, including coverage for doctor’s visits and preventative care.
The standard monthly premium for 2024 is $174.70. This is how much individuals who earned $103,000 or less and couples who earned $206,000 or less will pay in 2024. If they earned more, their premium increases based on their income bracket. The highest bracket is for individuals who earned at least $500,000 and couples who earned at least $750,000, and they pay $594.00 a month.
In 2024, the Medicare Part B deductible is $240. After the deductible is met, Medicare typically pays 20% of the Medicare-approved cost for covered services and supplies.
Medicare Part C Costs
Medicare Part C is more commonly known as Medicare Advantage. CMS expects the average monthly premium to be $18.50 in 2024. Medicare Advantage enrollees need to know that they also have to pay the Medicare Part B premium.
Costs can vary from plan to plan. Some plans are HMOs. These plans usually have premiums of around $0 to $50 and low co-pays. However, enrollees must use network providers. Other plans are PPOs. These plans also usually have low co-pays, but the premiums tend to be around $30 to $150 or more. These plans use networks, and enrollees who stick to the network will pay less, but out-of-network benefits are available.
Medicare Part D Costs
Medicare Part D provides prescription drug coverage. Costs vary by plan, and high-income earners pay a surcharge.
CMS expects the average monthly Medicare Part D premium to be $55.50 in 2024. Individuals who earned more than $103,000 and couples who earned more than $206,000 pay a surcharge of $12.90 to $81.00, depending on their income bracket.
Enrollees go through four phases of coverage based on their out-of-pocket costs.
- Phase 1 is the deductible. The patient pays $545.
- Phase 2 is the initial coverage limit. The patient pays 25% up to $5,030.
- Phase 3 is the coverage gap. The patient pays 25% of generic and brand prescriptions.
- Phase 4 is the catastrophic coverage limit. The patient pays $0 for all covered medications.
- A 30-day supply of covered insulin is capped at $35.
Helping Medicare Clients Navigate Costs
Medicare costs can be confusing, so when meeting with clients, you may need to go through their plan options and break down their expected premium and out-of-pocket costs and explain the importance of using network providers. If clients are having trouble paying for coverage, encourage them to apply for the Medicare Savings Program and Medicare Extra Help.
Do you have questions about Medicare costs? Western Asset Protection is here to support you. Contact us today.