The Centers for Medicare and Medicaid Services (CMS) announced the monthly Medicare Part A and B premiums for 2024 on Thursday, with the costs set to go up by 6 percent next year.
The premiums would increase by $9.80 from $164.90 to $174.70 in 2024 and the annual deductible for Medicare Part B beneficiaries will go up from $226 to $240 as well. This price increase comes after Medicare Part B premiums went down for the first time in more than 10 years in 2023.
Medicare Part B covers medically necessary services and preventive services, which include mental health services, some outpatient prescription drugs, ambulance services and durable medical equipment.
The premium announced Thursday falls in line with what the Medicare Board of Trustees estimated the 2024 premium would be earlier this year.
“The increase in the 2024 Part B standard premium and deductible is mainly due to projected increases in health care spending and, to a lesser degree, the remedy for the 340B-acquired drug payment policy for the 2018-2022 period under the Hospital Outpatient Prospective Payment System,” the CMS said.
The 340B Drug Pricing Program, established in 1992, requires that pharmaceutical manufacturers participating in Medicaid provide outpatient drugs at significantly discounted prices to eligible health care organizations.
Before 2018, the Medicare reimbursement rate to eligible hospitals for Part B-covered outpatient drugs was the average sales price of a product plus 6 percent. In 2017, however, the CMS changed the payment rate to the average sales price minus 22.5 percent, saying this more accurately reflected the cost that 340B-eligible hospitals incur.
This updated rate was in effect from 2018 to 2022 before the Supreme Court ruled it was unlawful due to the federal government not conducting a survey of hospitals’ acquisition costs beforehand.
As part of the remedy in response to the suit, the CMS proposed a one-time lump sum payment to hospitals affected by the new payment policy from 2018 to 2022. The agency estimated these entities received about $10.5 billion less than they would have, $1.5 billion of which providers had already received by the time the remedy was proposed. As such, it was proposed that the remaining $9 billion be divvied out to the 340B-eligible entities that were affected.