One of the biggest misconceptions about Medicare is that coverage under it is free. Not only do enrollees pay a premium for Medicare coverage (aside from Part A, which is usually free), but they're required to meet deductibles and cover the cost of copays for things like prescription drugs.
Now the good news is that a new law is set to take effect that should limit the extent to which seniors have to pay out of pocket for prescription drugs. The bad news is that what they might save on the cost of medication, they could wind up paying anyway in the form of higher Medicare Part D drug plan premiums.
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Paying up either way
Medicare Part D plan providers currently pick up a relatively small share of the cost of medications. Once the new rule limiting enrollees' costs goes into effect, Part D plan providers will have to cover more of the cost. To make up for that, they'll likely raise the cost of premiums for enrollees.
HealthView Services recently released a report on projected Medicare Part D premiums for 2024. And it found that the average cost of premiums will rise between 42% and 57% from 2023 in the five states with the largest population of residents aged 65 and over -- California, Florida, Texas, New York, and Pennsylvania.
For a low-end drug plan, the average annual Part D premium is expected to rise by $128.32 in 2024 compared to 2023. For a high-end plan, the average premium is expected to rise by $380.96.
A big problem
Higher Part D premiums may be a big problem for cash-strapped seniors who are barely making ends meet. And they're especially problematic in 2024 given that Social Security benefits aren't getting a particularly large boost in the new year.
Social Security's upcoming cost-of-living adjustment is only going to be 3.2%, and it's coming at a time when the cost of Medicare Part B is rising as well. By contrast, in 2023, Social Security benefits rose by 8.7%, and the cost of Part B actually went down.
How to Save Money on Medicare Part D
Part D plan premiums may be set to rise in 2024. But one thing you can do to offset those extra costs is explore your plan options during open enrollment, which runs through Dec. 7.
Even if your current Part D plan isn't changing for the worse in 2024, it may be that there's a more cost-effective plan choice for you. So it pays to compare your choices and see if there are any savings to be reaped.
Along these lines, if you're coming off certain medications, you may want to consider moving to a lower-end drug plan for 2024. Otherwise, you could end up paying more for a plan you don't really need.
Healthcare is one of those unavoidable expenses that seniors perpetually need to brace for. Unfortunately, the cost of securing Part D coverage may rise for a lot of people starting in 2024. Now that you know that, you can plan accordingly so you're not thrown for a financial loop.
