The Centers for Medicare and Medicaid Services (CMS) on Thursday announced monthly Medicare Part A and B premiums for 2024, with costs expected to rise 6 percent next year.
Premiums would increase by $9.80, from $164.90 to $174.70 in 2024, and the annual deductible for Medicare Part B beneficiaries would also increase from $226 to $240 US dollars rise. This price increase comes after Medicare Part B premiums fell in 2023 for the first time in more than 10 years.
Medicare Part B covers medically necessary and preventive services, including psychiatric services, some outpatient prescription drugs, emergency medical services, and durable medical equipment.
The premium announced Thursday is consistent with the Medicare Board of Trustees’ estimate of the 2024 premium earlier this year.
“The increase in the standard Part B premium and deductible in 2024 is primarily due to projected increases in healthcare spending and, to a lesser extent, the relief for the 2018-2022 340B purchased drug payment policy under the Hospital Outpatient Prospective Payment System,” said the CMS.
The 340B Drug Pricing Program, created in 1992, requires pharmaceutical manufacturers that participate in Medicaid to make outpatient medications available to eligible health care organizations at significantly discounted prices.
Prior to 2018, the Medicare reimbursement rate to eligible hospitals for outpatient medications that cover Part B was equal to the average selling price of a product plus 6 percent. However, in 2017, CMS changed the payment rate to the average sales price minus 22.5 percent, stating that this more accurately reflects the costs incurred by 340B-eligible hospitals.
This updated rate was in effect from 2018 to 2022 before the Supreme Court ruled it unlawful because the federal government had not previously conducted a survey of hospital acquisition costs.
As part of the remedial action in response to the lawsuit, CMS proposed a one-time lump sum payment to hospitals affected by the new payment policy from 2018 to 2022. The agency estimated that these facilities received about $10.5 billion less than they would have received, $1.5 billion of which providers had already received when the remedy was proposed. Therefore, it was proposed that the remaining $9 billion be distributed to the affected 340B eligible companies.
Copyright 2023 Nexstar Media Inc. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.