Medicare provides health coverage to millions of older Americans. But the costs seniors incur under Medicare can easily change from one year to the next.
In 2024, the standard Medicare Part B premium is rising from $164.90 to $174.70. That's an increase of $9.80. The annual Medicare Part B deductible is also rising from $226 to $240.
In addition, coverage under Medicare Part A is getting more expensive. Though most Medicare enrollees don't pay a Part A premium, seniors pay on a per-hospital-stay basis.
Image source: Getty Images.
Right now, Medicare Part A's inpatient deductible is $1,600, but next year, it's rising to $1,632. The cost of coinsurance beyond the 60-day hospital stay is also going up.
These increases are apt to impact Medicare enrollees across all income levels. But if you're a higher earner, you should gear up to pay even more for your Medicare coverage next year.
Will you face a surcharge on your Medicare premiums in 2024?
The standard Medicare Part B premium applies to seniors with moderate incomes or lower. But you might fall into the high-income category as a senior. If you saved really well during your working years, for example, and now have a multimillion-dollar 401(k) or IRA that you're able to tap, your annual income may be high enough to subject you to surcharges known as income-related monthly adjustment amounts, or IRMAAs.
You can use this table to see if you'll face an IRMAA in 2024
|
If You're Single With a Modified Adjusted Gross Income of: |
If You File a Joint Tax Return With a Modified Adjusted Gross Income of: |
Your IRMAA Will Be: |
Your Monthly Part B Premium Cost Will Be: |
|---|---|---|---|
|
Less than or equal to $103,000 |
Less than or equal to $206,000 |
$0 |
$174.70 |
|
Greater than $103,000 and less than or equal to $129,000 |
Greater than $206,000 and less than or equal to $258,000 |
$69.90 |
$244.60 |
|
Greater than $129,000 and less than or equal to $161,000 |
Greater than $258,000 and less than or equal to $322,000 |
$174.70 |
$349.40 |
|
Greater than $161,000 and less than or equal to $193,000 |
Greater than $322,000 and less than or equal to $386,000 |
$279.50 |
$454.20 |
|
Greater than $193,000 and less than $500,000 |
Greater than $386,000 and less than $750,000 |
$384.30 |
$559.00 |
|
Greater than or equal to $500,000 |
Greater than or equal to $750,000 |
$419.30 |
$594.00 |
Data source: CMS.gov.
IRMAAs don't only apply to Medicare Part B premiums. They also apply to Part D.
The difference is that while there's a standard Part B premium that all seniors can base their costs on, the cost of Part D can vary from plan to plan. This table, however, will tell you how much of a surcharge to expect on your Part D coverage on top of your plan's base premium.
|
If you're single with a modified adjusted gross income of: |
If you file a joint tax return with a modified adjusted gross income of: |
Your IRMAA will be: |
|---|---|---|
|
Less than or equal to $103,000 |
Less than or equal to $206,000 |
$0.00 |
|
Greater than $103,000 and less than or equal to $129,000 |
Greater than $206,000 and less than or equal to $258,000 |
$12.90 |
|
Greater than $129,000 and less than or equal to $161,000 |
Greater than $258,000 and less than or equal to $322,000 |
$33.30 |
|
Greater than $161,000 and less than or equal to $193,000 |
Greater than $322,000 and less than or equal to $386,000 |
$53.80 |
|
Greater than $193,000 and less than $500,000 |
Greater than $386,000 and less than $750,000 |
$74.20 |
|
Greater than or equal to $500,000 |
Greater than or equal to $750,000 |
$81.00 |
Data source: CMS.gov.
Here's a quick bit of context on the above numbers. When we talk about modified gross income, we're talking about income from two years prior to the calendar year in which you're getting coverage. So your 2024 IRMAA, if applicable, will be based on the tax return you filed in 2022.
Prepare to pay up
Even if you have a healthy income, higher Medicare costs could easily eat into your budget. So it's important to know what costs to anticipate.
The good news is that there's no income limit for Medicare eligibility -- even millionaires can enroll and get coverage. But being a higher earner will cost you, so if you earn just enough to be slapped with an IRMAA but not so much that you're rolling in money, you'll need to plan carefully for that extra expense.
