2024 Medicare Board of Trustees Report

The 2024 Medicare Board of Trustees Report has been released and there is some good news for retirees when it comes to their health coverage.

The first bit of good news is that the program is doing better than expected — the insolvency date for Medicare Part A has been pushed out an additional 5 years. This increase in time, according to the Board, is due to the belief that the "number of covered workers and average wages" will be "higher" moving forward.

The other good news is that there is a surplus in the Medicare Part A Trust Fund that is greater by $12.2 billion than expenditures.

Unfortunately, there is some bad news within the report that will directly impact retirees, especially those who do not plan accordingly.

The Trustees are projecting that costs for Medicare Part B and D will grow by at least 8.00% over the next 5 years, while GDP is projected to grow only 4.25% over the same time period. These increases in costs mean there may need to be more "premium sharing" between the federal government and Medicare beneficiaries.

The other concerning projection is that the surplus in Medicare Part A will end in 2029, and "thereafter" there will be deficits unless Congress takes regulatory action sooner than later.

Even with the bad news, costs within the program will inflate at either the same rate or in some cases even less than last year's projections. Here are the key comparisons:

With Medicare costs projected to outpace GDP growth, the implications for IRMAA planning are significant. Higher program costs could lead to increased surcharges for high-income beneficiaries.

Financial professionals should help clients plan ahead by understanding strategies to reduce MAGI and project future IRMAA costs based on these Trustees Report projections.