The Centers for Medicare and Medicaid Services (CMS) has announced that Medicare Part A and B premiums will increase by 6 percent in 2024. This means that the monthly premiums will go up by $9.80, from $164.90 to $174.70. Additionally, the annual deductible for Medicare Part B beneficiaries will also increase from $226 to $240. This comes after Medicare Part B premiums experienced a decrease for the first time in over a decade in 2023. The increase in premiums and deductibles is attributed to projected increases in healthcare spending and the remedy for the 340B-acquired drug payment policy for the 2018-2022 period.
Medicare Part B provides coverage for medically necessary services and preventive services, including mental health services, some outpatient prescription drugs, ambulance services, and durable medical equipment. The announced premium for 2024 aligns with the estimates made earlier this year by the Medicare Board of Trustees. The CMS stated that the increase in premiums and deductibles mainly stems from projected healthcare spending and the remedy for the 340B-acquired drug payment policy.
The 340B Drug Pricing Program, established in 1992, requires pharmaceutical manufacturers participating in Medicaid to provide outpatient drugs at discounted prices to eligible healthcare organizations. The CMS had changed the payment rate for Part B-covered outpatient drugs in 2017, resulting in a decrease, but the Supreme Court later ruled this change unlawful. As a remedy, the CMS proposed a one-time lump sum payment to affected hospitals. The agency estimated that these hospitals had received $10.5 billion less than they should have, with the remaining $9 billion being proposed to be distributed to the affected 340B-eligible entities.
