Rising Medicare Costs: A Growing Burden for Seniors
Higher Premiums Ahead for Medicare Part B
The Centers for Medicare and Medicaid Services (CMS) has announced that Medicare Part B premiums will increase by $10.30 to $185.00 per month in 2025, up from $174.70 this year. This represents a significant jump, outpacing both inflation and the Social Security cost-of-living adjustment (COLA).
The Impact on Seniors
For many seniors, this increase will consume a growing portion of their monthly Social Security checks. Mary Johnson, an independent Social Security and Medicare policy analyst, notes that “when Part B premiums grow at a faster rate than Social Security COLAS, premium costs eat away at the purchasing power of seniors’ benefits.” This is particularly concerning for high-income Americans, who will also pay an Income-Related Monthly Adjustment Amount (IRMAA).
IRMAA: An Additional Burden
IRMAA affects roughly 8% of people with Medicare Part B, and the amount paid varies based on income. For example, married couples filing separate tax returns with a modified adjusted gross income of $106,000 or less will pay the standard $185.00 premium, while those earning more than $106,000 but less than $394,000 will pay an additional $406.90, bringing their total monthly premium to $591.90.
A Long-Term Trend
This increase is not an isolated incident. Medicare Part B premiums have been rising faster than COLA for years, with an average annual increase of 5.5% from 2005 to 2024, compared to a 2.6% average annual COLA increase. This disparity is partly due to the fact that Medicare costs are not included in the consumer price index used to calculate COLA.
What It Means for You
If you’re already receiving Social Security benefits, the new premium will be automatically deducted from your checks starting in January. If you’re not yet receiving benefits, make sure to pay the new higher amount starting in January. With Medicare enrollment now open, it’s essential to carefully consider your options and plan for these increased costs.
Understanding Medicare
Medicare consists of different parts, with Part B covering physicians’ services, outpatient hospital services, and other medical services not covered by Part A. Part A, which covers inpatient hospital stays and skilled nursing facilities, will also see an increase in its inpatient hospital deductible to $1,676 in 2025. For those who haven’t worked long enough to qualify for premium-free Part A, the full monthly Part A premium will rise to $518.
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