IRA Changes Will Drive Up Part D Bid in 2024, But Premiums Will Stabilize

In its annual release of the Medicare Part D bid information for the coming plan year, CMS on July 31 projected that the average total monthly Part D premium will decrease from $56.49 in 2023 to $55.50 in 2024, thanks in large part to the basic part of the premium being held down by a stabilization provision in the Inflation Reduction Act (IRA). But unlike previous years, where the national average monthly bid amount (i.e., the weighted average of the estimated cost to Part D plan sponsors of providing their benefit package) steadily dropped, CMS reported that the bid amount will rise from $34.71 for 2023 to $64.28 in 2024. That’s largely because of IRA-mandated changes and CMS’s recent rulemaking on pharmacy price concessions.

Starting in 2024, the IRA limits the annual increase in the base beneficiary premium to no more than 6%. The base beneficiary premium, which is the starting point for calculating a plan-specific basic Part D premium, is projected to rise by 5.9% to $34.70 in 2024.

© 2024 MMIT
Lauren Flynn Kelly

Lauren Flynn Kelly Managing Editor, Radar on Medicare Advantage

Lauren has been covering health business issues, including drug benefits and specialty pharmacy, for more than a decade. She served as editor of Drug Benefit News (the predecessor to Radar on Drug Benefits) from 2004 to 2005 and again from 2011 to 2016, and now manages Radar on Medicare Advantage. Lauren graduated from Vassar College with a B.A. in English.

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