Joanne: Whether you are making your transition to Medicare for the first time or you've been enrolled in Medicare coverage for years, it's important to stay up to date with the constantly changing landscape of Medicare costs. Luckily, in this episode, we will give you an overview of everything you need to know about the 2024 Medicare cost updates. 

Cameron: But, before we start, my name is Cameron Giardini and together with my co-host Joanne Giardini Russell, we operate Giardini Medicare, which is an independent insurance agency based out of Southeast Michigan. Now, although we are based in Michigan, we do work virtually over the phone to directly help consumers in about 13 states find the right Medicare coverage for them.

If we do not work in your state, we will connect you with another trusted independent agent who will be able to help you find the right coverage you want. We now also have a free online course that is available for you to register for and you can do this to learn about all of the Medicare topics we could think of.

You can access the course by going to gmedcourse.com. So a brief overview of today's episode. We will talk about Original Medicare costs and again, everything we'll talk about is really the updated costs for 2024. So, with that in mind, we'll also talk about Medicare Advantage costs, Medigap costs, which are Medicare supplements, Part D costs, as well as some other topics like unexpected Medicare costs, and lastly, projections for Medicare costs in the future.

But first, we have to start with the Original Medicare costs, which Joanne will talk about. 

Joanne: So here we go. Let's start with Medicare Part A. So Medicare Part A premiums for the 99 percent of beneficiaries that qualify for premium-free Part A coverage due to their paying Medicare taxes during their work history.

The premium for Part A is just like it sounds. It's zero per month in 2024. However, if you do have to pay for Medicare Part A, your monthly premium would be $278/month for those who have paid Medicare taxes while having worked 30 to 39 quarters, and the premium can be as high as $505/month For those people that have worked for less than 30 quarters.

Now let's talk about part A, out-of-pocket costs. There is a deductible. That deductible in 2024 is $1,632 per inpatient hospital benefit period. Now there's also going to be daily co-pays for inpatient hospital stays beyond 60 days, but we're going to link to some of those things in the show notes. There are also Part A out-of-pocket costs that are associated with skilled nursing facilities.

With days 1 through 20 having a 0 copay. Days 21 through 100 will have a $204 copay per day. And on days 101 and beyond, you're going to pay the full cost. Now finally, under Medicare Part A, most covered home health and hospice services do have a 0 copay. Now we're going to shift to Part B premiums. The base premium for all beneficiaries in 2024 is $174.70 per month. 

Now that figure is up from $164.90 per month last year. Let's talk about the Part B out-of-pocket costs. The out-of-pocket costs for covered Part B services are generally much easier to understand compared to the Part A out-of-pocket costs that we just talked about. Preventive services are typically fully covered with a $0 copay cost to the consumer.

The non-preventive services covered by Part B have a yearly deductible of $240 for 2024. Now, that deductible also has gone up a little from $226 in 2023, and then after somebody satisfies that deductible at $240 this year, there's a 20% co-insurance of the Medicare-approved amount Like always, we also always want to remind you to not stress too much about all those dollar figures I just went through, since your enrollment in a Medicare Advantage plan or a Medigap plan is going to impact how you experience these Medicare out of pocket costs.

Cameron: Yeah, exactly. Those are good numbers to know. We always want to update you every year, but don't fixate on every little thing and say, okay, well, what is my Part A deductible again? I have to remember that because, as Joanne mentioned, If you have Medigap or Medicare Advantage coverage, which is extremely likely, you'll have one of those two options.

These costs will be different than what you would have with just Original Medicare So with that in mind, let's talk about medicare advantage costs if you want to check out some of these numbers or statistics, we will link to them in the show notes But a lot of the information like always when it comes to statistics is from the kaiser family foundation So just a brief reminder medicare advantage plans.

They're not part of original Medicare Which is Part A and Part B and instead, they provide a private alternative to Original Medicare from insurance companies with Medicare. These plans also offer a bundled package of Medicare benefits, which include Part A, Part B, and typically Part D benefits with this private coverage option.

So premiums for Medicare Advantage plans, CMS, which is the Centers for Medicare and Medicaid Services, report that in 2024, the average Medicare Advantage premium is $18.50 per month. This is a slight increase from last year, 2023, which was $17.86 per month. Also in 2024. 99 percent of Medicare beneficiaries have access to a Medicare Advantage plan with a $0 per month premium.

So, although the average premium is above $0, as you can see, a lot of people will experience a $0 per month premium with Medicare Advantage. We can see this in the Kaiser Family Foundation data because 66 percent of Medicare Advantage plans available on the market have a 0 per month premium, which is the same as it was in 2023.

Also, in addition to potentially having $0 per month for the premium, some plans do offer an actual reduction to your Part B premium. In fact, in 2024, 19 percent of Medicare Advantage plans will offer some type of Part B premium reduction. Remember, with Medicare Advantage plans, you will still have to pay your Part B premium.

In addition to what you have for a Medicare Advantage premium. So even if you have a $0 Medicare Advantage premium, you're still responsible for paying that base premium Joanne talked about for Part B. Now although the majority of Medicare Advantage plans do have a $0 per month premium, there are still plans offered with much, much higher premiums than that.

For example, in Southeast Michigan, Our most expensive Medicare Advantage plan is $283 per month, and that is in addition to your Part B premium. But shifting a little bit away from the Medicare Advantage premiums, what about the out-of-pocket costs with Medicare Advantage plans? So, most plans do have deductibles that are still $0 when it comes to Medicare Advantage plans.

And just based on our own experience, we have not seen large changes to the overall plan co-pays or deductibles. Now, unlike Original Medicare and Medicare Advantage plans, they do have what is called a maximum out-of-pocket. And there's a limit on this maximum out-of-pocket. So in 2024, the highest a Medicare Advantage plan's max out-of-pocket can be for in-network services is $8,850.

However, this is just the upper limit. But, many Medicare Advantage plans will have max out of pockets lower than this. So you might get some people that try to scare you and say every single plan will have a large max out-of-pocket of $8,850. That's more of a tactic just to make it seem like all plans have very high out-of-pocket costs with Advantage plans.

So, to combat that, we looked at the Medicare data for all Medicare Advantage plans in 2024. And this was across the country. And we calculated that the average maximum out-of-pocket for Advantage plans is $5,073 for the year, which is, as you can see, almost $4,000 lower than that actual upper limit.

Levels also are different with HMO plans versus PPO plans. Using those same calculations, we found that HMO plans have an average max out-of-pocket. At about $4,596 PPO plans have an average max out of pocket being 5,695. But either way you look at it, again, those numbers are much lower than that upper limit of $8,850.

And now Joanne can move on and talk about Medigap costs for 2024. 

Joanne: So, unlike with Medicare Advantage plans, you should expect to pay a monthly premium if you do enroll in a Medicare Supplement plan, as you can hear us, we always talk about these as Medigap. Medigap policies are health insurance plans that are sold by private insurance companies, and they're filling the financial gaps that are left behind by original Medicare.

Think back to when we first talked about the out-of-pocket costs with Part A and Part B, these Medigap plans are designed to cover those gaps, Medigap premiums. There are two main ways that Medigap plans differ when it comes to monthly premiums, and this is typically by geography and by plan letter.

So let's talk about the plan letter first. So in almost all states, Medigap plans come with standardized basic medical benefits. These standardized plans are labeled by plan letters that range today from Plan A to Plan N. However, because many insurance companies offer Medigap plans, the plans of the same letter from different insurance companies will have different premiums, despite having essentially the same coverage benefits.

As an example, in Southeast Michigan, the lowest monthly Plan G premium for a 65-year-old female is about $110 per month. But the 10th cheapest carrier on that list is $130 per month. They also, Medigap plants are going to be rated on geography. So where you live also has a massive impact on the premiums.

For Medigap plans that you have available to you. Currently, as of recording this episode, for a 65-year-old male, the most popular Medigap plan, which is Plan G, ranges from roughly $115/month in a state like Iowa. to roughly $270 per month in New York... Now, let's talk about out-of-pocket Medigap costs in 2024. The most important yearly change is to the deductible.

The Part B deductible is 240 for 2024. As we mentioned earlier, this directly impacts Medigap plans like Plan G and Plan N, which do not cover that Part B deductible. Also, there's a high deductible for Plan F and Plan G, and that deductible is set at $2,800 in 2024. 

Cameron: Now rounding out our parts of Medicare cost topics, let's talk about Part D.

So Part D coverage, again, is not part of Original Medicare, but it is offered by private insurance companies that contract with Medicare. This coverage is designed to help cover most of the medications you fill at retail pharmacies. So think about the ID card you bring to the pharmacy when you're filling those regular prescriptions.

You can also receive prescription drug coverage through a Medicare Advantage plan instead of a standalone Part D plan. Now when it comes to premiums in 2024, The Centers for Medicare and Medicaid Services, report that the average Part D premium in 2024 is $55.50 per month, which matches what we see in our home state of Michigan, where we calculated the average monthly premium is about 51.37/month

very close to the figure that they presented. Now, does this mean that you should expect to pay this amount? No. Nationwide, Part D premiums can range from $0 per month up to triple digits per month. Based on our personal experience, a majority of our clients, have premiums about in the $0 to $30 per month range.

So again, with all of these things we talk about, average does not mean it's exactly what you're going to pay, just like it suggests. Now, out-of-pocket costs are associated with Part D, in 2024, the maximum Part D deductible is $545, and this is for the yearly deductible. This is up slightly from $505 in 2023.

Now again, this does not mean every plan will have a $545 deductible. We calculated that the average national Part D deductible is $391. So again, it is not too much lower than $545, but it is not exactly all plans are set at that highest limit. However, generally speaking, higher monthly premiums result in lower deductibles.

If you are dead set on having a $0 deductible in Michigan, for example, You would have to pay north of $75 per month for Part D coverage. So don't go into it thinking you have to have the lowest deductible possible. We talk about it in other episodes and in videos we'd make, but you have to look at the overall cost for prescriptions when you're finding Part D coverage.

Now another change to Part D cost is the initial coverage limit. This increased from $4,660 for the year up to $5,030 for the year in 2024. Now what this means is that when the full retail cost of your prescriptions reaches $5,030, you enter what is known as the donut hole, at least you do in 2024. Now this does not mean you're spending $5,030 out of pocket to reach this, but it is the threshold they use.

Again, based on the full retail cost of your prescriptions. Now, since this episode is just an updated episode about 2024 costs, make sure to listen to our previous episodes about the Part D coverage phases if you want to learn more about what that means for you. And last but not least, Medicare Part D has had a change to Catastrophic Coverage.

This is the final phase of Part D coverage. In the recent past, if you had reached Catastrophic Coverage, You would either pay 5 percent or certain co-pays for the actual cost of your prescriptions for the remainder of the year. And those numbers could add up depending on how expensive your medication was.

However, now in 2024, If you reach catastrophic coverage, you pay 0 for prescriptions covered by your plan for the remainder of the year. Again, listen to our other episodes for more details about these Part D coverage phases and costs. So we talked about the basics, you know, Part A, Part B, Part D, that kind of thing, but what about unexpected Medicare costs in 2024?

Joanne: So, these throw people off. There's something called IRMAA. We've talked about this in other episodes, too. So, if you want a deep dive into those, please pull that episode. What IRMAA is, it stands for an Income Related Monthly Adjustment Amount. This is essentially where Medicare will go back, look at your income from two years prior, and assess a different premium figure to what you're going to pay for Medicare.

Income thresholds. So, remember, in 2024 Again, they're going to look back two years. They're going to be looking at your 2022 modified adjusted gross income. So you may experience an IRMAA surcharge if in 2022 you had filed a single and earned $103,000 or more, or if you filed joint taxes and you earned as a household $206,000 plus.

Those are where the income thresholds are going to start, where you're going to see a surcharge. And that is the IRMAA. So, for Part B, for the lowest IRMAA level in 2024, you would pay $244.60 per month instead of just the usual $174.70/month And then for the highest IRMAA income bracket, you could pay as much as $594/month for your Part B premium.

Now, there's also IRMAA related to Part D on the drug plan side of things. So this is again, this is a surcharge related to higher income. This is not you purchasing an extra Part D plan, but there's another surcharge. So the lowest IRMAA level would result in you having to pay $12.90 per month added to your Part D premium.

The highest IRMAA level is resulting in up to $81/month being added to your Part D or your Medicare Advantage plan premium. A lot of people, like I said, tend to think this is adding another drug plan, and it's not. It's just that IRMAA surcharge for high income. Again, listen to the other episodes if you want to really deep dive into this.

If you're above the income thresholds that we mentioned, you want to dive into those episodes so that you can avoid paying these higher premiums for longer than you should. We have some tips and tricks built into that episode. Let's talk about penalties. Now, the Part A penalty is extremely uncommon.

We're not going to discuss that in this episode, but Part B penalty, we do see this a little bit, not nearly as much as we see a Part D penalty, but a Part B penalty, B as in boy, is 10 percent of the $174.70 per month base premium for Part B. You will get this Part B penalty, for every 12-month period of time you did not have proper coverage and should have had Medicare in place, you'll be assessed that 10 percent penalty in addition to your Part B premium.

Now, again, we see Part D, as in drug penalties, far more often, and this penalty is 1 percent of the base Part D beneficiary premium, which is $34.70 for each month that you have gone without having creditable Part D coverage. For more than 63 days in a row. For example, if you went 15 months without drug coverage, that 15% penalty is what that will equal.

15 months equals 15%. 15% of $34.70 would result in a $5.20 per month penalty added to your Part D premium. And the thing to understand here is that that is never going to end. That penalty will be added during your entire lifetime of having a Part D plan or a Medicare Advantage plan in place.

So again, and it can change going forward because and it can't exactly it can increase So make sure please to listen to all the other episodes that we do have about Medicare penalties as well So you can better learn how to avoid them all 

Cameron: So we know that's a lot of numbers when it comes to unexpected Medicare costs and the sole episode is a lot of numbers, but in reality Medicare changes every year So we have to bring you these to keep you up to date So bear with us, but we are going to talk about projections for Medicare costs in the future.

So basically, we're just going to get ahead of ourselves a little bit and try to see what we might be talking about in future episodes for years to come. I'm sure we don't have to tell you this, but Medicare costs, have been and they will only continue to increase going forward in the future. Now every year, the Medicare Board of Trustees releases a yearly report that highlights the future cost projections.

And the recent report that we have access to is from 2023. So here's what they say about Medicare Part A, Part B, and Part D cost projections. And what we'll do is we'll talk about projections for five years from now, which is 2029. So they project that Part A premiums, the full Part A premium, could be $659 per month.

And that again, that's for the full amount somebody might pay if they have not. met 30 credits through work history. And then $362 per month is what they project the reduced premiums to be for Part A for those who have worked and paid Medicare taxes for 30 to 39 quarters. Now, as far as Part A out-of-pocket costs go, in their report, they project that the Part A deductible could be $1,964 per hospital benefit period.

So this is not even a yearly benefit, or this is not even a yearly deductible when it comes to Part A. It is actually per benefit period, so you could have multiple Part A deductibles per year. They also project for skilled nursing co-pays you may have to pay $245.50 per day for days 21 through 100 if you are in a skilled nursing facility.

And then shifting over to Part B, the Part B premium, again keep in mind that is $174.70 per month right now. So five years from now they are projecting that base Part B premium, not even considering Irma, could be $240.10 per month. And then when it comes to out-of-pocket costs, they project the yearly Part B deductible to be $335 for the year 2029.

We don't foresee the 20 percent co-insurance you're responsible for changing with Original Medicare, so for now hopefully just that deductible amount would change. And then last but not least, with Part D, when it comes to Part D premiums, This doesn't translate directly into the average Part D premium, but Joanne talked about the national base beneficiary premium that's more used for the penalty calculations.

That is projected to be $46.44 in 2029. Last but not least, Part D out-of-pocket costs, according to the trustee's report, that maximum Part D deductible, which is 545 per year this year, is projected to decrease a little bit in 2029, going down to $495 for the year. So again, that's just some interesting looks into the future of what Medicare costs might look like.

And like we mentioned at the beginning of this episode, Medicare costs, They're a constantly changing landscape. So although you're caught up now, don't forget to tune into our future episodes. So you will be updated when 2025 cost details are released. And as always, please leave us a review on your podcast app.

and subscribe so you can listen to future episodes. You can always find more Medicare content from us by going to YouTube or TikTok and searching Giardini Medicare. Last but not least, please send us an email if you have any feedback or questions, and you can do this by emailing info@gmedicareteam.com.

Thank you and have a great day.