Increases are expected to become effective in calendar 2024.
The Centers for Medicare & Medicaid Services (CMS) have released the Announcement of Calendar Year (CY) 2024 Medicare Advantage (MA) Capitation Rates and Part C and Part D Payment Policies (the Rate Announcement).
The capitation rates provide the base amount paid to MA plans prior to risk score adjustments.
The Biden Administration finalized a proposal to raise Medicare Advantage payments by 3.32 percent in 2024, slightly above the 1 percent raise that it proposed.
The Inflation Reduction Act 2023 (IRA) made several improvements to the standard Part D drug benefit defined in the Social Security Act. Part D benefit-related IRA updates that will be in place for CY 2024 include the following:
- Beginning in CY 2024, cost-sharing for Part D drugs will be eliminated for beneficiaries in the catastrophic phase of coverage.
- Beginning in CY 2024, the Low-Income Subsidy program (LIS) under Part D will be expanded so that beneficiaries who earn between 135 and 150 percent of the federal poverty level and meet statutory resource limit requirements will receive the full LIS subsidies that, prior to 2024, were available only to beneficiaries earning less than 135 percent of the federal poverty level; these subsidies provide for $0 premiums and low-cost, fixed copayments for covered prescription drugs.
- During CY 2024, Part D plans must not apply the deductible to any Part D covered insulin product and must charge no more than $35 per month’s supply of a covered insulin product in the initial coverage phase and the coverage gap phase.
- During CY 2024, Part D plans must not apply the deductible to an adult vaccine recommended by the Advisory Committee on Immunization Practices and must charge no cost-sharing at any point in the benefit for such vaccines.
- Beginning in CY 2024, the annual growth in the Base Beneficiary Premium will be capped at 6 percent. The Base Beneficiary Premium for Part D is limited to the lesser of a 6 percent annual increase, or the amount that would otherwise apply under the prior methodology had the IRA not been enacted.
The IRA passage in August of this year is expected to affect the healthcare of millions of Americans. Provisions will change how certain drug prices get determined, limit out-of-pocket costs for older Americans, and could help ensure continued coverage for Medicaid beneficiaries when the COVID-19 Public Health Emergency (PHE) ends May 11.
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