America’s seniors can expect higher healthcare costs in 2025, with the Centers for Medicare and Medicaid Services (CMS) confirming that premiums for Medicare Part B will increase by approximately 6% in the upcoming year.
Medicare Part B, which is essential for covering visits to doctors, outpatient care, vaccines, medical equipment, and some home healthcare, is seeing this adjustment as CMS addresses projected price changes and increases in service usage.
Here’s a look at what the new rates mean and how they compare with Social Security’s cost-of-living adjustment (COLA).
Medicare Part B Premiums in 2025
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The standard Medicare Part B premium will increase from $174.70 in 2024 to $185.00 in 2025, marking a $10.30 monthly hike. In addition, the annual deductible for Medicare Part B will rise from $240 to $257.
While this year’s increase is modest in comparison to some past adjustments, it still represents a noticeable uptick for seniors on fixed incomes.
Notably, the premium in 2023 was $164.90, and it experienced a rare decrease from the previous year. However, costs are now on the rise again.
Medicare Part B Premiums vs. Social Security COLA
Medicare premiums have historically risen faster than both inflation and Social Security’s cost-of-living adjustments (COLA), often diminishing the value of COLA increases for retirees. Social Security’s 2025 COLA is set at 2.5%, adding roughly $50 more per household, based on average monthly payments.
With inflation running at 2.4%, the modest Social Security increase may feel limited against healthcare premium hikes. Many seniors may find that a portion of their Social Security raise will go directly toward covering these Medicare costs.
What Higher-Income Enrollees Will Pay
For higher-income Medicare Part B enrollees, an Income-Related Monthly Adjustment Amount (IRMAA) is added to their premiums, impacting approximately 8% of Medicare Part B beneficiaries.
For married couples who file separately with incomes of $106,000 or less, only the standard premium of $185.00 will apply. However, those with higher incomes will pay significantly more:
- Those earning above $106,000 but below $394,000 will have an IRMAA of $406.90, bringing their monthly total to $591.90.
- For seniors with incomes over $394,000, the IRMAA will be $443.90, totaling $628.90 monthly with the base premium included.
These adjustments reflect CMS’s tiered approach to sharing costs among wealthier Medicare participants, ensuring that premium rates align with income levels.
How This Affects Social Security Payments
For seniors already receiving Social Security benefits, the new Medicare Part B premium for 2025 will be deducted automatically from their Social Security payments starting in January.
Those who are not yet on Social Security but are enrolled in Medicare Part B will need to manually account for the increase and make sure their payments align with the new rates.
This latest change in Medicare premiums highlights the importance of staying updated on healthcare costs in retirement planning, especially for those relying on fixed incomes.
While Social Security’s COLA adjustment is designed to help with cost-of-living increases, rising healthcare costs mean retirees should be prepared to see part of their Social Security raise offset by Medicare’s higher premiums.