Medicare Part D 2024 Drug Premiums Soar in Advance of Lower Inflation Reduction Act Cap on Catastrophic Drug Costs

HealthView Services’ Retirement Healthcare Costs Interim Data Report shows average Part D premiums in the five states with the largest retiree populations increasing between 42% and 57%  

DANVERS, Mass., Nov. 20, 2023 /PRNewswire/ — A new HealthView Services analysis of Medicare Part D prescription drug plans (PDPs) in California, Florida, New York, Pennsylvania and Texas shows a dramatic increase in 2024 premiums. This is despite a prediction earlier this year by the Centers for Medicare & Medicaid Services that it expected basic Medicare Part D premiums to decline in 2024 as a result of the Inflation Reduction Act.

With more than 18 million Americans enrolled in standalone Part D plans, the Medicare Part D Premiums: Retirement Healthcare Costs Interim Data Report (2023-24), shows retirees who sign up for Medicare Part D plans from three of the largest Medicare providers in each state will pay, on average, 42% to 57% more in 2024 for plans compared to 2023. For high-end coverage, Part D cost increases range from 21% to 77%. This compares to Medicare Part B premiums rising by 5.9% in 2024, and a Social Security cost-of-living adjustment of 3.2%. 

“Significantly more expensive premiums will come as a shock to the millions of retirees enrolled in Medicare Part D plans who, along with CMS, may have been anticipating lower costs with the introduction of the Inflation Reduction Act,” said Ron Mastrogiovanni, founder & CEO of HealthView Services. “HealthView as well as other experts, including Kaiser Family Foundation (KFF), have been predicting that Inflation Reduction Act provisions, including changes to the cap on catastrophic coverage and cost sharing methodology between the government and providers, would lead to costs being shifted from carriers to retirees. This is what we are clearly seeing.”

The report notes that these changes should be seen in the context of overall healthcare expenses which for many will include Part B, supplemental insurance, and all other out-of-pocket costs for drugs, as well as hospitalizations, doctors, tests, dental, vision and hearing. Part D premiums currently account for around 9% of lifetime retirement healthcare costs for a couple retiring in 2023. HealthView Services expects this to increase in 2024, and potentially if they rise by a similar level in 2025, Part D premiums would amount to over 14% of total healthcare costs. The jump in Part D premiums will take a significant bite out of the average $708 annual increase in Social Security benefits, before higher Part B premiums and other expenses are accounted for.

For approximately 25% of retirees, higher premiums will be offset by the potential for lower out-of-pocket costs for drugs from Inflation Reduction Act provisions, including drug price negotiations, inflation-based price controls and the lowering of maximum costs from $7,025 in 2024 to $2,000 in 2025. Caps on the price of insulin that have already been implemented are currently benefiting retirees with diabetes. 

“The 25% of retirees with out-of-pocket expenses higher than the new $2,000 cap may well realize savings on their out-of-pocket costs for medications as a result of these changes,” added Mastrogiovanni. “With increased cost sharing and price controls on drugs over the remainder of the decade, while everyone will experience higher premiums, many will benefit from a lower rate of increase in out-of-pocket expenses than would otherwise have been the case.”    

The new report details announced premiums for high-end, medium, and basic Part D plans for 2023 and 2024, which offer retirees different levels of prescription drug coverage. Data for all 50 states, as well as on Medicare Advantage plans that include prescription drug coverage options, will be incorporated into HealthView Services’ 2024 full-year Retirement Healthcare Cost Data Report.       

“Consistent with long-term healthcare trends, the increase in Part D premiums will continue to drive higher healthcare costs, and underscores the need to plan for them,” said Mastrogiovanni. “The repricing of Part D coverage in advance of the implementation of key components of the Inflation Reduction Act may well continue into 2025 before we see a return to more normalized premium increases.”   

HealthView Services ( is a leading provider of retirement healthcare cost data, Social Security optimization, and long-term care retirement planning and portfolio management tools for the financial services industry. The firm provides an array of planning apps, from 401(k)-focused to advisor-facing, all with the goal of creating funding solutions today to cover future in-retirement health care expenses. The company will launch its industry-first automated retirement healthcare decumulation software – Health Planner Plus – in 2025.   

Contact: Simon Erskine Locke
Islay Communications, Inc.
Tel: 917-359-6969

SOURCE HealthView Services