Seniors will pay more for Medicare in 2025. Here's what to know.
America's seniors will pay more for their health care in the new year, as the Centers for Medicare and Medicaid Services (CMS) has announced that premiums for its Part B plan will increase by about 6% in 2025.
Part B covers visits to doctors, outpatient care, preventative services such as vaccines, medical equipment like wheelchairs as well as home health care. (Part A, which covers inpatient care in hospitals and other facilities, is premium-free for all but about 1% of beneficiaries due to taxes paid by most retirees while they worked.)
What is the Medicare Part B premium for 2025?
The standard monthly premium for Medicare Part B enrollees will climb by $10.30, or about 6%, to $185.00 from $174.70 in 2024, CMS said Friday.
Meanwhile, the annual deductible for all Medicare Part B beneficiaries will rise to $257 in 2025 from $240.
The reason for the 2025 premium and deductible increases is due to "projected price changes and assumed utilization increases that are consistent with historical experience," according to the Centers for Medicare & Medicaid Services.
The premium stood at $164.90 in 2023, when the cost fell just over $5 from the year before, a rare decline.
How does that compare with the Social Security COLA?
Medicare's Part B premiums have generally outrun inflation as well as Social Security's annual cost-of-living adjustment (COLA).
Yearly inflation climbed 2.4% in September, while the Social Security COLA for next year will be 2.5%, or an average of $50 more per household.
What do higher-income Medicare enrollees pay?
Given that a beneficiary's Part B monthly premium is based on one's income, wealthier Americans also pay an Income-Related Monthly Adjustment Amount, or IRMAA, which impacts about 8% of those with Medicare Part B, CMS stated.
- Those who are married and lived with their spouses at any time during the year, but who file separate tax returns with modified adjusted gross income of $106,000 or less, will pay just the Medicare Part B premium of $185.00 a month.
- Beneficiaries with incomes above $106,000 but below $394,000 are looking at paying IRMAA of $406.90 plus the standard $185.00, or $591.90 a month.
- Seniors with incomes in excess of $394,000 will pay $443.90 in IRMAA and the standard $185.00, or a total of $628.90 a month.
How does that impact Social Security benefit payments?
Medicare enrollees who are already getting Social Security benefits can expect the new 2025 Part B premium to be automatically deducted from their Social Security checks in January.
Those not yet receiving Social Security benefits but paying Medicare Part B each month will need to make sure they are paying the increased tally, beginning in January.
