Medicare Premiums Are Rising in 2024: Here’s How to Save Money

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If you’re on Medicare in 2024, the good news is that your coverage is expanding in meaningful ways. Your out-of-pocket costs for Part D medications could be going down, too.

The bad news is we’re back to premium increases after a rare premium reduction in 2023. The worse news is that the Social Security cost-of-living adjustment (COLA) doesn’t keep pace with the premium increases – it doesn’t even really keep pace with inflation in general.

We have suggestions for how to soften the blow.

Medicare Costs Are Rising in 2024

The new Part B premium will cost beneficiaries $174.70 a month in 2024, up from $164.90 in 2023. This increase is more typical than the rate adjustments we’ve seen over the past few years.

In 2023, premiums actually went down because there was an Alzheimer’s drug that wasn’t as popular as the government thought it would be in 2022. Even if it’s typical, no one likes to see their premiums go up.

Medicare Part B is a foundational part of the federal insurance program, covering doctor visits, outpatient surgeries, medical equipment and more. Nearly 1 in 5 Americans could be impacted by the Medicare increase.

In 2023, the nation’s largest federal health care program covered 65.7 million people – both people ages 65 and older along with some younger people with long-term disabilities. That’s 19.6% of the U.S. population.

The Part B deductible — the cost enrollees pay out of pocket each year before Medicare starts paying its share — is also increasing by $14 in 2024.

The Part A deductible will be higher, too. Medicare Part A primarily covers hospital stays and skilled nursing facilities.

2024 Medicare Costs at a Glance

Program Cost Up from Increase

Medicare Part B premium

$174.70 a month

$164.90 in 2023

$9.80 per month

Medicare Part B deductible

$240 per year

$226 in 2023

$14 per year

Medicare Part A deductible

$1,632 per year

$1,600 in 2023

$32 per year

Why Are Medicare Costs Going Up in 2024?

Medicare costs go up nearly every year to adjust for inflation and new coverage items. Over the last 24 years, premiums have only gone down twice: Once in 2012 and once in 2023. There have been a few years where costs stayed static, but year-over-year increases are the norm.

The 2012 decrease can be attributed largely to the passage of the ACA (aka Obamacare) in 2010. The law encouraged an overall lowering of healthcare costs across the industry.

For Medicare recipients, that manifested in lower physician and outpatient costs, which were significant enough for Part B premiums to sink by $15.50. They didn’t reach pre-ACA levels again until 2017.

In 2022, the government was predicting outsized demand for a new Alzheimer’s drug. The projections were so large that Part B premiums went up by a whopping $21.60. The drug was a bit of a let down in terms of performance and demand. Because costs were so much less than the government was expecting, premiums went down by $5.20 in 2023. This year, they went up by $9.80.

Medicare is complicated. Here are seven things you should know about the program and how it works. 

2024 Medicare Changes That Could Save You Money

While premiums and deductibles are going up, there are other changes to Medicare in 2024 that could potentially save you money. Here are the programs and benefits to keep an eye on:

  • Part D: Out-of-pocket costs for drugs will be capped, which could save you thousands if you’re on the right medications.
  • Extra Help: Historically, this program has offered a free level and a subsidized level where you still had to pay a reduced amount according to your income. Starting in 2024, if you qualify, it’s free. No more Part B premiums or deductibles required. Not even prorated ones.
  • Part B: Coverage is expanding across a number of domains, like mental health, chronic pain and compression treatment.

Medicare Costs Will Likely Eat Up Your Social Security Increase

This year, Social Security recipients got some disappointing news.

The annual cost-of-living adjustment (COLA) is increasing by just 3.2% in 2024. Historically, that’s not … the absolute worst. But it is out of line with inflation, and the past two years, Social Security recipients received COLAs of 5.9% (2022) and 8.7% (2023).

Have questions about Social Security? We have answers. 

When you hold the 3.2% COLA to the increase of 5.9% in Part B premiums every year, you can see how the math doesn’t add up. And while inflation isn’t as out of control as it was in 2022, it’s currently 3.4% year-over-year. That’s more than the COLA – even before you account for Part B premium hikes.

Whether the expanded coverage and lower out-of-pocket costs for Part D drugs will make up for it depends entirely on your individual financial and medical situation.

Pro Tip

The Social Security Administration usually sends out mailed notices of new benefit amounts in early December — but you can see it now by going online and checking your My Social Security account.

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3 Ways to Lower Your Medicare Costs in 2024

While the COLA news is discouraging, there are a few things you can do to lower your Medicare expenses as 2024 rolls on. Let’s take a look at three options:

  • Deduct Medicare premiums if you’re self-employed. If you run your own business in retirement, odds are that you (and your spouse) can deduct Medicare premiums on your tax return. Depending on your financial situation, this strategy could potentially make your healthcare premiums effectively free.
  • Check your coverage and medical bills. Depending on your plan, you may be limited to certain doctors. Ensure you’re visiting in-network providers before you step into the office, and check for medical billing errors after you leave. They’re surprisingly common when you’re on Medicare, so you’re probably getting billed more than you owe.
  • Request an Income-Related Monthly Adjustment Amount (IRMAA). If your financial situation changes throughout the year, be sure to let the SSA know. If your income goes down because of retirement, loss of a pension, divorce, widowhood or a select number of other circumstances, you can request an IRMAA. If it lowers your income enough, you may qualify for Extra Help – which is an extra big deal this year as it’s now premium-free for anyone who qualifies.
Pro Tip

Make sure to accurately enter all the medications you take into the tool, including the dosages, quantity and frequency. Leaving out these details can result in incorrect cost estimates.

Pittsburgh-based writer Brynne Conroy is the founder of the Femme Frugality blog and the author of “The Feminist Financial Handbook.”

Rachel Christian is a Certified Educator in Personal Finance and a senior writer for The Penny Hoarder.