Medicare Advantage Premiums Are Increasing 

A: Yes. The average monthly premium for all Medicare Advantage (MA) plans is projected to increase 3.6%, from $17.86 this year to $18.50 in 2024, the Centers for Medicare & Medicaid Services (CMS) said.

Nearly 73% of enrollees who remain in their plan will see little or no increase in their premiums next year, however, CMS said.

The MA plan increase includes MA-Prescription Drug plans.

The plan choice will also be increasing, CMS said. Those with Medicare will continue to have the ability to switch Medicare options, the agency added. MA supplemental benefit offerings will also slightly rise in 2024, CMS said, but it did not provide specifics.

CMS previously announced that the average total monthly premium for Medicare Part D coverage is expected to decrease 1.8%, from $56.49 in 2023 to $55.50 in 2024. The agency credits improvements to the Part D prescription drug program to the Inflation Reduction Act (IRA) “that allow people with Medicare to benefit from reduced costs.”

The IRA has helped people with Medicare Part D coverage to have improved and more affordable benefits, CMS said. These benefits include a $35 cost-sharing limit on a month’s supply of each covered insulin product, recommended adult vaccines at no cost, and additional savings on Part D drug coverage next year, it added.

CMS projects that MA enrollment will grow from 31.6 million this year to 33.8 million in 2024 and will represent about half of all people enrolled in Medicare.

Q: Which states don’t tax retirement income?

A: Nine states — Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming — don’t have a personal income tax, so retirees don’t pay state taxes on Social Security benefits, pension income, distributions from traditional IRAs and 401(k)s, and other retirement income. (New Hampshire is phasing out a tax on dividends and interest by 2027.)

A few other states — Illinois, Iowa, Mississippi and Pennsylvania — also don’t tax Social Security and pension benefits as well as withdrawals from 401(k)s and IRAs. But these states do tax investment income.

Note: Some of these states have relatively high inheritance, estate and sales taxes. Those taxes can influence how much money you may or may not save as a resident of these states.

Related: Choosing the Right Medicare Plan

Joey Solitro is a contributing writer and Katelyn Washington is a tax writer for Kiplinger.com. For more on this and similar money topics, visit Kiplinger.com.

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