The Medicare Part B premium in 2025 will increase more than the Social Security premium

by Junna Base November 12, 2024

According to the Centers for Medicare and Medicaid Services (CMS), seniors will have to pay more for Medicare Part B again next year.

The standard monthly premium for Medicare Part B enrollees will rise $10.30 from $174.70 this year to $185.00 in 2025, CMS said late Friday. The premium was $164.90 in 2023. The annual deductible for all Medicare Part B beneficiaries will increase from $240 in 2024 to $257. The increases are primarily due to projected costs and usage increases, according to CMS.

The 2025 Medicare Part B premium increase is outpacing both inflation and the Social Security cost of living adjustment (COLA). Annual inflation rose 3.2% in October, and the COLA for 2025 will be 2.5%, an average of $50 more per month.

“If Part B premiums grow faster than COLAS Social Security, premium costs will take a growing share of monthly Social Security checks,” said Mary Johnson, an independent policy analyst for Social Security and Medicare who, at age 73, also receives these benefits relates.

How much more do high-income Americans pay?

Because a beneficiary’s monthly Part B premium is based on income, high-income Americans also pay an Income-Related Monthly Adjustment Amount (IRMAA). According to CMS, about 8% of people with Medicare Part B are affected by IRMAA.

“While most Social Security recipients age 65 and older have benefits high enough to support the $10.30 per month increase in Part B premiums, from $174.70 to $185.00 US dollars, the same does not apply to people who pay higher premiums based on income,” Johnson said.

CMS said beneficiaries who are married and living with their spouses at any time during the year but file separate tax returns from their spouses with a modified adjusted gross income of the following:

$106,000 or less only pays the Medicare Part B premium of $185.00 per month
More than $106,000 and less than $394,000 will pay an IRMAA of $406.90 plus the standard $185.00, for a total of $591.90 per month
$394,000 or more pays $443.90 in IRMAA and the standard value of $185.00, for a total monthly amount of $628.90.

The cost of Medicare Part B has exceeded the cost of COLA for years

2025 is not an outlier. Data shows that Medicare Part B premiums have been rising faster than COLA for years, which is one reason many seniors are struggling.

From 2005 to 2024, Part B premiums rose an average of 5.5% per year, while COLAs averaged less than half that rate, at just 2.6%, Johnson’s analysis showed.

“The disparity is due in part to the fact that Medicare costs are not included in the Consumer Price Index, which is currently used to calculate the COLA,” she said.

During that period, Part B premiums did not increase only four times, three of them during former President Barack Obama’s administration (2009, 2014 and 2015) and once during former President Donald Trump’s administration in 2018, she said.

Nevertheless, under the last presidential administrations – George W. Bush, Obama, Trump and Joe Biden – there were still significant double-digit premium spikes, Johnson said.

When do seniors start paying the new Medicare Part B premium?

For those already receiving Social Security benefits, the new 2025 Part B premium will be automatically deducted from Social Security checks, typically in January.

Anyone who doesn’t already receive Social Security benefits and pays Medicare Part B every month will have to make sure they pay the new, higher amount starting in January.

What is Medicare Part B?

Medicare is made up of different parts, and Part B includes physician services, outpatient hospital services, certain home health services, durable medical equipment, and some other medical and health care services not covered by Medicare Part A.

Part A covers inpatient hospitalization, skilled nursing facilities, hospice, inpatient rehabilitation, and some home care services. According to CMS, approximately 99% of Medicare beneficiaries do not pay a Part A premium because they have at least 40 quarters of Medicare-covered employment, as determined by the Social Security Administration.

The Part A inpatient hospital deductible will increase by $44, from $1,632 in 2024 to $1,676 in 2025, CMS said.

For people who have not worked long enough to qualify for premium-free Part A, the full monthly Part A premium is $518, $13 more than in 2024.

Medora Lee is a money, markets and personal finance reporter for USA TODAY. Reach her at [email protected] and sign up for our free Daily Money newsletter every Monday through Friday morning for personal finance tips and business news.

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