In 2025, Medicare premiums will rise for millions

Medicare premiums will rise in the new year, the Centers for Medicare & Medicaid Services (CMS) has announced.

Medicare is a federal health insurance program overseen by the Social Security Administration (SSA). It covers people age 65 and older and some under age 65 with certain disabilities or medical conditions.

Medicare Part B covers doctor’s visits, outpatient care, preventative services such as vaccinations, equipment such as wheelchairs and home health care. Part A covers inpatient hospital and facility care and does not provide premiums for most beneficiaries.

Starting in January 2025, Medicare Part B premiums will increase by about 6 percent.

In 2025, the standard monthly premium for Medicare Part B enrollees will be $185, an increase of $10.30 from the 2024 rate of $174.70. This amount will be increased each month by the Social Security checks deducted. For those who do not receive Social Security, payments must be made directly through their Medicare account, at their bank, or by mail, with bills sent every three months.

The annual deductible for all Medicare Part B beneficiaries will increase to $257 in 2025, $17 more than the deductible of $240 in 2024.

All Medicare Part B enrollees pay the standard premium, but wealthier individuals also pay what’s called an income-related monthly adjustment amount (IRMAA). The income limits for married individuals who lived with their spouse throughout the year and filed separate tax returns are as follows:

• Income of $106,000 or less only pays the standard Medicare Part B premium of $185.00 per month.
• Beneficiaries with income over $106,000 but under $394,000 pay an IRMAA of $406.90 plus the standard $185.00.
• Those earning more than $394,000 pay an IRMAA of $443.90 and the standard premium of $185.00, which is $628.90 per month.

For Part A, the inpatient hospitalization deductible will increase by $44 next year to $1,676, up from $1,632 in 2024. For those who have not worked long enough to qualify for premium-free Part A the monthly Part A premium is $518, $13 from this year.

The 2025 Medicare Part B premium exceeds inflation and the Social Security cost of living adjustment (COLA), which is designed to increase benefits each year so that seniors and other recipients do not lose purchasing power over time. The annual inflation rate rose 3.2 percent in October, while the COLA will be 2.5 percent in 2025.

The CMS said the changes were due to “projected price changes and assumed occupancy increases that are consistent with historical experience.” Medicare premiums don’t rise every year – but declines in costs are rare. The premium was $164.90 in 2023, down just over $5 compared to the previous year.