Medicare Part B premiums will increase in 2025, according to the Centers for Medicare and Medicaid Services (CMS). The standard monthly premium for Medicare Part B enrollees will rise by $10.30 to $185.00 in 2025 from $174.70 in 2024. The premium was $164.90 in 2023.
The annual deductible for all Medicare Part B beneficiaries will also increase to $257 from $240 in 2024. The increases are mainly due to projected costs and usage increases, CMS explained. This jump in the 2025 Medicare Part B premium outpaces both inflation and the Social Security cost-of-living adjustment (COLA).
Mary Johnson, an independent Social Security and Medicare policy analyst, said, “When Part B premiums grow at a faster rate than Social Security COLAs, premium costs consume a growing portion of monthly Social Security checks.”
High-income Americans will face additional charges because a beneficiary’s Part B monthly premium is based on income. Approximately 8% of Medicare Part B participants are affected by the Income-Related Monthly Adjustment Amount (IRMAA). For beneficiaries married and living with their spouses but filing separate tax returns, the premiums will vary.
Those with a modified adjusted gross income of $106,000 or less will pay the standard $185.00 monthly premium. For incomes more than $106,000 and less than $394,000, the IRMAA will add $406.90, resulting in a total monthly payment of $591.90. Incomes of $394,000 or more will face an IRMAA of $443.90, making the total $628.90 per month.
Part B premium increase outpaces COLA
Medicare Part B costs have historically outpaced Social Security COLA. Data indicates that from 2005 to 2024, Part B premiums increased on average by 5.5% per year, while COLAs averaged just 2.6%.
Johnson attributes this disparity to the exclusion of Medicare costs in the consumer price index used to calculate the COLA. Johnson noted, “There were only four times when Part B premiums did not increase, three of which were during former President Barack Obama’s administration (2009, 2014, and 2015) and once during former President Donald Trump’s administration in 2018.” Despite these periods, significant double-digit premium spikes have occurred under every recent presidential administration, including those of George W. Bush, Obama, Trump, and Joe Biden.
The new 2025 Part B premium will typically be automatically deducted from Social Security checks starting in January for current recipients. Others who pay Medicare Part B monthly will need to ensure they pay the new higher amount starting January. Medicare Part B covers physicians’ services, outpatient hospital services, certain home health services, durable medical equipment, and other medical services not covered by Medicare Part A.
Part A covers inpatient hospital stays, skilled nursing facilities, hospice care, inpatient rehabilitation, and some home health services. About 99% of Medicare beneficiaries do not pay a Part A premium, as they have at least 40 quarters of Medicare-covered employment. The inpatient hospital deductible in Part A will rise to $1,676 in 2025 from $1,632 in 2024.
For those who haven’t worked long enough for premium-free Part A, the full monthly Part A premium will increase to $518, up $13 from 2024.
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