Big changes are coming to Medicare in 2024. From tax hikes for high earners to expanded telehealth services, America’s seniors should prepare for shifts in health care coverage and costs.
The changes are “good news” for all beneficiaries regarding affordability and coverage, Pavani Rangachari, a professor of health care administration and public health and the director of the Master of Healthcare Administration program at the University of New Haven in Connecticut, told The Epoch Times.
With premiums projected to remain stable even as new payment models aim to improve care quality, next year will test how well sweeping health care reforms serve the needs of an aging population.
New Medicare Tax Hike Targets Top Earners
One of the most significant changes is the implementation of the Medicare tax increase. This tax hike applies only to individuals making over $400,000 per year. Lower earners will not see a change.
The White House indicates the increase targets high-paid professionals and wealthy business owners who shield income by classifying it as neither earned nor investment income.
Specifically, the tax rate will rise from 3.8 percent to 5 percent starting Jan. 1, 2024. The funds are intended to help extend the program’s solvency by at least 25 years.
Medicare Advantage Growth Comes With Cautions
Another significant change is the expansion of Medicare Advantage (MA) plans, as the number of MA enrollees is projected to increase by 47 percent in 2024 compared to 2023. This program offers an alternative to traditional Medicare by providing extra benefits like vision, dental, and hearing coverage.
If you are worried about changing plans during open enrollment, which started Oct. 15, the Centers for Medicare & Medicaid Services (CMS) has published Star Ratings for Medicare Advantage plans. These ratings evaluate the quality of health and drug services offered based on past patient experiences.
Medicare Advantage plans are health plans run by private companies with Medicare contracts. Choosing the wrong plan could limit income—as certain health plans’ coverage costs more than others, has lower quality, or leaves prescriptions unfilled. It may also be difficult or expensive to change plans later. Depending on employer or union rules about providing health insurance, joining an MA plan could mean losing employer or union coverage, including for spouses and dependents, according to the CMS.
“I think there’s been a lot of recent concern that has come from the federal government in particular, but also consumer advocacy groups, that Medicare Advantage enrollees are often more likely to report trouble affording health care than people on traditional Medicare,” said Loren Anthes, head of external affairs and programs at Yuvo Health, a healthcare company working with federally qualified health centers.
Medicare Advantage plans increasingly use artificial intelligence to determine when to stop covering services, Mr. Anthes noted.
Medicare Drug Prices Targeted While Premiums Remain Stable
The CMS project that averages the cost of premiums, benefits, and plan choices for Medicare Advantage and the Medicare Part D prescription drug program will remain stable in 2024.
In 2024, Medicare will launch a new payment model for primary care providers, promoting quality-care incentives for those who offer high-quality care and potentially lower costs. By increasing payments for primary services, it aims to attract more clinicians.
CMS will require drug companies to pay the government if Part D and Part B drug prices rise faster than inflation, Ms. Rangachari said. This could enable negotiating with pharmacies to stock more generics, helping control costs without reducing access or quality.
“That’s the way to rein in the cost of drugs, which really contributes a lion’s share of the cost of overall health care expenditures,” she added.
The new small mandatory models could also link drug payments to improved outcomes, reduced disparities, affordability, and lower expenses.
Increased Coverage for Telehealth Services
Medicare will expand telehealth services, improving access to remote medical consultations. Telehealth has become a very popular way to see patients, especially among patients living in rural areas. The COVID-19 pandemic highlighted the need for increased access to these services.
The Consolidated Appropriations Act of 2023 extended many Medicare telehealth flexibilities for people in the program through Dec. 31, 2024, including:
- Access across the United States, not just rural areas.
- Allowing in-home telehealth care instead of forcing patients to travel to a health care facility.
After 2024, some Accountable Care Organizations may still offer telehealth, enabling providers to treat patients remotely regardless of location.
This will give beneficiaries greater access to care from home.
Changes to the Low-Income Subsidy
Some Part D prescription drug coverage changes will affect everyone, while others only impact Low-Income Subsidy (LIS) recipients, according to David Lipschutz, associate director at the Center for Medicare Advocacy.
The Low-Income-Subsidy program, often called “the extra help program,” assists Medicare beneficiaries in covering prescription drug expenses, reducing the overall costs associated with Medicare prescription drug coverage.
These changes tie to the Inflation Reduction Act, a 2022 legislation intended to restrain price increases by decreasing the federal deficit, making prescription medications more affordable, supporting domestic energy production, including clean sources, and other measures.
“The way the benefit is structured now, there’s a full benefit and a partial benefit based upon someone’s income and resources,” Mr. Lipschutz said. “But the partial benefit is being eliminated so that, now, everybody who is eligible for the partial starting next year will be eligible for the full benefit.”
There will be changes beyond the Low-Income Subsidy, Mr. Lipschutz noted.
In 2024, the 5 percent coinsurance requirement for catastrophic coverage under Part D will be eliminated, and out-of-pocket spending will be limited to $2,000 in 2025, he noted. “That’s in addition to the changes that went into effect this year, like capping monthly costs for insulin to $35 and making certain preventive vaccines free of charge.”
New Voluntary Program Aims to Improve Population Health
In September, CMS announced the new voluntary AHEAD model, which stands for States Advancing All-Payer Health Equity Approaches and Development Model, to improve population health management by states. The program aims to better address chronic disease, behavioral health, and other conditions.
CMS will partner with participating states to redesign health care delivery and improve overall population health. This will supposedly be accomplished by enhancing care quality and efficacy, reducing health disparities, and improving outcomes.
