The 2024 Medicare Board of Trustees Report has been released and it appears that there is some good news for retirees when it comes to their health coverage.
The first bit of good news that the Trustees are reporting is that the program is doing better than expected as the insolvency date for specifically Medicare Part A coverage has been pushed out another 5 years to 2036.
This increase in time before insolvency, according to the Board, is due to the belief that the “number of covered workers and average wages” will be “higher” moving forward.
The other bit of good news from the Trustees is that there is a surplus in Medicare Part A Trust Fund that is greater by $12.2 billion than expenditures.
AND, the even better news from the Trustees is that this “surplus” will continue through 2029.
Unfortunately, though, there is some bad news within the Trustee’s Report and this bad news will directly impact retirees, especially those who do not plan accordingly.
In terms of bad news, the Trustees are projecting that the costs for Medicare Part B and D will be growing by at least 8.00% over the next 5 years while the GDP will only grow by 4.25% at the same time.
These increase in costs means that there may have to be more “premium sharing” between the federal government and those on Medicare.
The other bad news is that “surplus” in Medicare Part A will end in 2029 and “thereafter” there will be deficits unless Congress takes regulatory actions sooner than later.
Even with this bad news from the 2024 Medicare Board of Trustees costs within the program will inflate at either the exact same rate or in some cases even less than last year’s projections.
This is very good news for retirees!
Below is breakdown of the 2024 Medicare Board of Trustees cost projections per Medicare Part going forward:
Possible 2025 Part A costs:
| Medicare Part A Costs | ||||
| Projections | Part A Deductible per Incident | Days 61 –90 | Lifetime Reserve Days | SNF Daily Co-insurance |
| 2024 Projections for 2025 | $1,684 | $421 | $842 | $211 |
| 2023 Projections for 2025 | $1,712 | $428 | $856 | $214 |
From the chart above the possible 2025 costs for Part A may be lower than previous year’s expectations set by the Trustees.
However, the 2024 projections state that over the next 8 years these costs will increase by a rate of 3.61% annually which is higher than the 2023 projections of only 3.43%.
Possible 2025 Part B costs:
| Part B Costs | ||
| Projections | Part B Premium (monthly) | Part B Deductible |
| 2024 Projection for 2025 | $185 | $257 |
| 2023 Projection for 2025 | $185 | $257 |
Projections from 2023 are exactly the same as this year in both the Part B Premium and Deductible.
The Trustees are projecting that the Part B premium will inflate by 5.90% while the Deductible will inflate by 7.08% from 2024 to 2025.
As for the future, unlike Medicare Part A, these two costs will inflate at rates lower than previously projected.
According to the Trustees the average annual rate of inflation through 2033 may be:
- Part B Premium – 6.25%.
- Part B Deductible – 6.39%.
Possible Part D costs:
Medicare Part D coverage (medications) is run by private health insurance companies who must adhere to regulations set forth by the Centers for Medicare Services (CMS).
With the passing of the Inflation Reduction Act premiums can only increase by 6.00% at a maximum annually through 2029 regardless of market conditions.
As for the National Base Premium, which determines the Part D Late Enrollment Penalty as well as IRMAA surcharges the rate of inflation over the next 9 years will inflate by over 4.30% annually, which is higher than last year’s determination.
IRMAA Projections:
Medicare’s Income Related Monthly Adjustment Amount or IRMAA is a surcharge upon the current year’s Part B and Part D premiums for those who earn too much income while in Medicare.
For more information on IRMAA please click here.
IRMAA – Part B Surcharges:
According to the Trustees the surcharges per IRMAA Threshold will inflate at the same rate as the Medicare Part B premium through 2033.
With the Medicare Part B premium increasing by slightly over 6.20% annually for the next 8 years the IRMAA-B surcharges will too.
IRMAA – Part D Surcharges:
The biggest move in terms of Medicare costs increasing over the next 8 years, according to the Trustees, will be within the Part D IRMAA Surcharges.
From 2024 to 2025 the Trustees are expecting that each IRMAA – D Surcharge will increase by at least 5.93% which, like Parts A and B is similar to the Trustees’ 2023 projections.
As for the future, from 2026 to 2033 the Surcharges, depending on the Income Threshold will inflate by between 8.20% to 14.07%.
By 2033 the monthly IRMAA- D Surcharge per Threshold may be:
| Part D | |||||
| Year | Tier 1 | Tier 2 | Tier 3 | Tier 4 | Tier 5 |
| 2033 | $34.70 | $71.70 | $108.70 | $145.60 | $158.00 |
Conclusion to Medicare Board of Trustees 2024 Report:
According to the Trustees of Medicare the rate of inflation for the majority of Medicare costs will remain constant from last year’s projections.
Moving forward from 2025 costs for Part A and the IRMAA – D Surcharge will be higher while the Part B Premium and Deductible should inflate at a lower rate than last year’s projections.
The good news is that those who are turning 65 years of age today, enrolling into Medicare and planning on living until age 90 should experience slightly lower future costs for coverage than what was projected last year.
However, because of such a steep increase in the rate of inflation for IRMAA – D Surcharges those reaching and staying IRMAA throughout their retirement will experience significantly higher costs.
Medicare is going insolvent.
The only possibility of saving the program is to either cut internal expenses, raise premiums on retirees, raises taxes on everyone working or simply adjust IRMAA so people who have more income pay more.
According to the Trustees projections it looks like IRMAA will become a bigger factor in retirees’ lives than previously thought.
