The Centers for Medicare and Medicaid Services (CMS) has recently announced the 2024 monthly premiums for Medicare Part A and B. These premiums are set to increase by 6% next year, reflecting a rise in healthcare costs.
In 2024, the premiums will rise by $9.80, going from $164.90 to $174.70. Additionally, the annual deductible for Medicare Part B beneficiaries will increase from $226 to $240. It’s worth noting that this increase comes after a decline in Medicare Part B premiums in 2023, a rarity in over a decade.
Medicare Part B covers a range of services, including medically necessary services, preventive services, mental health services, outpatient prescription drugs, ambulance services, and durable medical equipment.
The announced premium for 2024 aligns with the estimate made by the Medicare Board of Trustees earlier this year.
The CMS explained, “The increase in the 2024 Part B standard premium and deductible is mainly due to projected increases in healthcare 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 340B Drug Pricing Program, established in 1992, requires pharmaceutical manufacturers participating in Medicaid to offer outpatient drugs at significantly discounted prices to eligible healthcare organizations.
Prior to 2018, eligible hospitals received Medicare reimbursement for Part B-covered outpatient drugs at the average sales price of the product plus 6%. However, in 2017, the CMS changed the payment rate to the average sales price minus 22.5%, claiming that this reflected the actual costs incurred by 340B-eligible hospitals more accurately.
From 2018 to 2022, this updated rate was in effect until the Supreme Court declared it unlawful due to the federal government’s failure to survey hospitals’ acquisition costs beforehand.
As a response to the suit, the CMS proposed a one-time lump sum payment to hospitals affected by the new payment policy during the 2018-2022 period. The agency estimates that these entities missed out on about $10.5 billion, with $1.5 billion already received by providers before the remedy was proposed. So, the proposal suggests distributing the remaining $9 billion among the affected 340B-eligible entities.
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