Medicare Prescription Drug Premiums Projected to Drop in 2024

Average monthly Medicare premiums for Part D prescription drug coverage are projected to drop to $55.50 in 2024, down 1.8% from $56.49 this year, the Biden administration announced Monday.

“Stable premiums for Medicare prescription drug coverage in 2024 are supported by improvements to the Part D program in the Inflation Reduction Act that allow people with Medicare to benefit from reduced costs,” said a fact sheet from the Centers for Medicare & Medicaid Services.

In 2022, the CMS required Part D plans to apply “all price concessions they receive from network pharmacies to the negotiated price at the point of sale, so that the beneficiary can also share in the savings at the pharmacy. This change is projected to decrease Part D beneficiary out-of-pocket costs by $2.62 billion in 2024,” the fact sheet said.

The CMS announced the projected basic monthly premium—which is based on drug plan bids submitted to the agency—to help consumers understand cost trends before they select plan coverage for 2024 during Medicare open enrollment, which begins later this year.

The Medicare prescription drug benefit helps beneficiaries pay for brand-name and generic prescription drugs. More than 51 million Medicare beneficiaries are enrolled in the coverage.

The CMS also released the Part D national average monthly bid amount, which helps help Medicare prescription drug plans sponsors finalize their premiums in preparation for Medicare open enrollment for 2024 coverage.

This year’s open enrollment period will run from Oct. 15 to Dec. 7, 2023. The CMS expects to release final 2024 premium and cost-sharing information for private Medicare Advantage and Part D plans this September.