While some Medicare costs have increased in 2024, the CMS has also made regulations to ensure fairness and core benefits for Medicare Advantage and Part D plans.

It’s not easy to sort through the annual changes to Medicare programs and costs. Some premiums and deductibles will cost more this year than last, and new enrollees won’t have access to some older plans.

On the plus side, federal policymakers have adjusted coverage to allow comprehensive, affordable coverage.

Read on for more information about your Medicare changes for 2024.

In 2024, about 67.4 million people were enrolled in Medicare. Healthcare costs rise each year, and Medicare premiums and deductibles increase to compensate.

That said, the Centers for Medicare & Medicaid (CMS), a division of the U.S. Department of Health and Human Services, is responsible for balancing the needs of enrollees and the program’s cost, as laid out in the Social Security Act.

The following sections explain the considerations that guide changes to Medicare programs and costs. The goal is usually to provide better, more efficient healthcare at a lower cost.

The costs of Original Medicare (Parts A and B) change each year. The following are the costs for 2024. The updated costs for 2025 have not yet been announced.

Part A

Medicare Part A pays for hospitalization, nursing homes, and some home healthcare costs.

Most people do not pay a premium for Medicare Part A because they prepaid for their coverage throughout their working years.

If you do pay, your premium costs have gone up for 2024. If you have worked for 30 to 39 quarters in your lifetime, you’ll pay $278 per month, a rise of $19 per month from 2021.

If you have worked less than 30 quarters in your lifetime, you’ll pay $505 per month, up $29 per month from 2021.

Medicare Part A also has a deductible. This deductible covers an individual benefit period of 60 days from the first day of hospital or care facility admission. The deductible for each benefit period in 2024 is $1,632 — $148 more than in 2021.

When care is required longer than 60 days, a coinsurance cost applies. For hospitalization, this means that in 2024, Medicare Part A will charge you a coinsurance of $408 per day for days 61 through 90 — up from $371 in 2021. Beyond 90 days, you must pay a rate of $816 per day for lifetime reserve days — up from $742 in 2021.

For admissions to skilled nursing facilities, the daily coinsurance for days 21 through 100 is $204 per day for 2024 — up from $185.50 in 2021.

A new benefit period begins once you have been out of hospital or nursing home care for 60 consecutive days. At that point, deductible and coinsurance rates are reset.

Part B

Medicare Part B covers physician fees, outpatient services, some home health services, medical equipment, and some medications.

Most people with Medicare Part B pay a premium for this plan, and the base cost in 2024 is $174.70 if:

  • you earn $103,000 or less a year and file an individual tax return
  • you earn $103,000 or less a year and are married but filed a separate tax return
  • you’re married, earn $206,000 or less, and filed jointly

Premium costs increase incrementally based on income. These income thresholds have risen from $97,000 for those filing separately and $194,000 for those filing jointly.

If your income is higher than the base threshold, you also have to pay an additional fee known as the income-related monthly adjustment amount (IRMAA). The fee starts at $69.90 and rises up to $419, depending on your income. This is an increase from $65.90 to $395.60 in 2023.

Finally, the deductible for Part B increased by $37 in 2021 to a total of $240 per year for 2024.

Part D

Part D premiums and deductibles vary by plan. But according to the CMS, in 2024, the base beneficiary premium for a Medicare Part D prescription drug plan is $34.70, a projected increase from $32.09 in 2023.

Under changes to Part D, if you need prescription drugs that cost more than $8,000 out of pocket, there’s now a cap on your annual costs. Most people will contribute between $3,300 and $3,800 toward the cap, and then the rest will be free through the end of the year.

This is a huge improvement from the previous policy under which you had to continue paying 5% of your drug costs for the remainder of the year.

In April 2024, the CMS released a ruling to improve several programs, including Medicare Part C (Medicare Advantage) and Part D. The current administration wants these changes to help encourage fairer competition, protect you as an enrollee, and ensure that Medicare plans meet all your needs.

Changes include:

  • Conflict of interest: The CMS is setting fixed compensation amounts for insurance agents and brokers regardless of the plan it recommends to new enrollees.
  • Personal data: The CMS is regulating how third-party marketing organizations (TPMOs) can use enrollees’ personal data.
  • Behavioral health: The CMS is implementing a new category for Medicare Advantage plans — “Outpatient Behavioral Health.” This category includes various healthcare professionals, and each plan needs to verify that these professionals have treated at least 20 patients in the past year.
  • Notification of supplemental benefits: It’s now required that plans send personalized notifications to enrollees between June 30 and July 31 about any unused supplemental benefits and how to access them annually.
  • Chronic illnesses: Medicare Advantage plans can now offer additional benefits if you’re living with a chronic illness. To ensure these benefits actually help you, the CMS requires plans keep track of relevant data.
  • Health equity: Medicare Advantage plans are now required to review the systems they use to ensure you get the right medical care at the most optimal cost. This is done by having a designated member on the review committee specializing in health equity and making this information easily accessible on the plan’s website.
  • Medication therapy management (MTM): The CMS is improving criteria to make sure you have more equitable access to Part D’s MTM program. Changes include adding HIV to the list of chronic diseases and adjusting the cost threshold based on the average annual cost of eight generic drugs.
  • Low income subsidy: The Low-Income Subsidy (LIS) or Extra Help program helps people with limited income pay for prescription medications. As of January 1, 2024, the partial version of the program was eliminated. This leaves only full benefits, which cover the majority, if not all, of your out-of-pocket costs under the program.
  • Monthly payments: Starting on January 1, 2025, all Medicare prescription drug plans, including those offered through Medicare Advantage, will offer you the choice to pay your out-of-pocket drug expenses in smaller monthly payments.

In 2025, the cap on out-of-pocket drug costs for Part D will be lowered even further to just $2,000. The CMS is also eliminating the donut hole, which is the gap in coverage during which you may pay more for prescription medications.

Starting in 2025, a new program that provides discounts on medications will replace the current one. Drug manufacturers will cover 10% to 20% of costs, leading to reduced out-of-pocket expenses.

While Part D premiums may increase slightly each year, they should only go up by an average of $2 going forward.

How much will Medicare cost in 2025 for seniors?

The premiums and deductibles of Part A and B change annually and haven’t been announced yet for 2025. However, CMS estimates that the average basic premium for Part D will be $36.78, $2.08 more than in 2024.

Medicare is always evolving, so it’s important to stay updated on changes. In 2024, costs for Original Medicare and Part D have increased.

However, the CMS has also made new rules to ensure that Medicare Advantage and Part D plans are fair and beneficial. These rules include protections for consumers when working with insurance agents and more access to information about supplemental benefits.