Posted on Friday, 13th October 2023 by

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More than 71 million Americans will see a 3.2% increase in their Social Security benefits and Supplemental Security Income (SSI) payments in 2024. Social Security retirement benefits will increase on average more than $50 per month starting in January.

Federal retiree’s annuities under the Civil Service Retirement System (CSRS) receive the full 3.2% increase while those under the Federal Employees Retirement System (FERS) receive 2.2%.

Federal benefit rates increase when the cost-of-living rises, as measured by the Department of Labor’s Consumer Price Index (CPI-W). The CPI-W rises when inflation increases, leading to a higher cost-of-living. This change means prices for goods and services, on average, are higher. The cost-of-living adjustment (COLA) helps to offset these costs.

Review all COLAs from 1999 to the present and discover how the cost of living is calculated each year.

Medicare Premiums 2024

The Centers for Medicare & Medicaid Services (CMS) released the 2024 premiums on October 12, 2023 for the Medicare Part A and Part B programs, and the 2024 Medicare Part D income-related monthly adjustment amounts.

Most people do not have to pay for Part A which covers hospital care. If you or your spouse worked for at least 10 years in Medicare-covered employment, you should be able to qualify for premium-free Part A insurance.

Each year, the Medicare Part B premium, deductible, and coinsurance rates are determined according to provisions of the Social Security Act. The standard monthly premium for Medicare Part B enrollees will be $174.70 for 2024, an increase of $9.80 from $164.90 in 2023. The annual deductible for all Medicare Part B beneficiaries will be $240 in 2024, an increase of $14 from the annual deductible of $226 in 2023.

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.




Medicare Part B Income-Related Premiums

Medicare B (Medical Insurance) covers physician and outpatient care. These premiums are based on your income. The higher your income the greater percentage of the full cost of this coverage is assumed by the Medicare participant.

Medicare Part B Income-Related Monthly Adjustment Amounts

 

Full Part B Coverage
Beneficiaries who file individual tax returns with modified adjusted gross income: Beneficiaries who file joint tax returns with modified adjusted gross income:

Income-Related Monthly Adjustment Amount

 Total Monthly Premium Amount
Less than or equal to $103,000 Less than or equal to $206,000 $0.00 $174.70
Greater than $103,000 and less than or equal to $129,000 Greater than $206,000 and less than or equal to $258,000 $69.90 $244.60
Greater than $129,000 and less than or equal to $161,000 Greater than $258,000 and less than or equal to $322,000 $174.70 $349.40
Greater than $161,000 and less than or equal to $193,000 Greater than $322,000 and less than or equal to $386,000 $279.50 $454.20
Greater than $193,000 and less than $500,000 Greater than $386,000 and less than $750,000 $384.30 $559.00
Greater than or equal to $500,000 Greater than or equal to $750,000 $419.30 $594.00

There are separate Part B income-adjusted rates for:

  • high-income beneficiaries who only have immunosuppressive drug coverage
  • Premiums for high-income beneficiaries with full Part B coverage who are married and lived with their spouse at any time during the taxable year but file a separate return, and for
  • Premiums for high-income beneficiaries with immunosuppressive drug only Part B coverage who are married and lived with their spouse at any time during the taxable year but file a separate return

Medicare Part D (Prescription Drug Coverage)

The 2024 Part D premium is $55 plus any income adjusted amount as noted below.

A beneficiary’s Part D monthly premium has been based on his or her income. These income-related monthly adjustment amounts affect roughly 8 percent of people with Medicare Part D. These individuals will pay the income-related monthly adjustment amount in addition to their Part D premium.

This income-related monthly adjustment amount is deducted from Social Security benefit checks or paid directly to Medicare.

Beneficiaries who file individual tax returns with modified adjusted gross income: Beneficiaries who file joint tax returns with modified adjusted gross income: Income-related monthly adjustment amount
Less than or equal to $103,000 Less than or equal to $206,000 $0.00
Greater than $103,000 and less than or equal to $129,000 Greater than $206,000 and less than or equal to $258,000 $12.90
Greater than $129,000 and less than or equal to $161,000 Greater than $258,000 and less than or equal to $322,000 $33.30
Greater than $161,000 and less than or equal to $193,000 Greater than $322,000 and less than or equal to $386,000 $53.80
Greater than $193,000 and less than $500,000 Greater than $386,000 and less than $750,000 $74.20
Greater than or equal to $500,000 Greater than or equal to $750,000 $81.00

There are separate Part D income-adjusted rates for Premiums for high-income beneficiaries who are married and lived with their spouse at any time during the taxable year but file a separate return.

Summary

Costs continue to rise and our COLAs aren’t keeping up with the increases across all sectors. Everyone is looking for ways to cut costs and economize wherever possible.

Even though our COLAs aren’t as generous as we like, we are fortunate to have them. I know many retirees who retired a decade ago, and are taking home the same annuity they retireed with. Those with fixed incomes are truly suffering due to the government’s excessive spending and unwillingness to balance the budget.

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Disclaimer: The information provided may not cover all aspect of unique or special circumstances, federal regulations, medical procedures, and benefit information are subject to change. To ensure the accuracy of this information, contact relevant parties for assistance including OPM’s retirement center. Over time, various dynamic economic factors relied upon as a basis for this article may change.

The advice and strategies contained herein may not be suitable for your situation and this service is not affiliated with OPM or any federal entity. You should consult with a financial, medical or human resource professional where appropriate. Neither the publisher or author shall be liable for any loss or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.

Last 5 posts by Dennis Damp

Posted in ANNUITIES / ELIGIBILITY, BENEFITS / INSURANCE, ESTATE PLANNING, FINANCE / TIP, RETIREMENT CONCERNS, SOCIAL SECURITY / MEDICARE, SURVIVOR INFORMATION | Comments (0)


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