Medicare Part B enrollees will have to dig a little deeper in their pockets in 2025, as the standard monthly premium and annual deductible have been increased.
The Centers for Medicare & Medicaid Services (CMS), on Friday, released new premiums for Part B, which covers doctor’s visits, outpatient hospital services, certain home health services and durable medical equipment.
The standard monthly premium for Medicare Part B beneficiaries who earn up to $106,000 per year and married couples who earn up to $212,000 per year will jump 5.9% to $185, an increase of $10.30 from $174.70 in 2024. The annual deductible for all Medicare Part B beneficiaries will be $257, an increase of $17.
For wealthier beneficiaries who are married and have lived with their spouse at any time during the taxable year, but file a separate return, costs are higher. They pay an income-related monthly adjustment amount, or IRMAA, on top of the standard monthly premium of $185.
For example, beneficiaries with incomes above $106,000 but below $394,000 will pay an IRMAA of $406.90 plus the standard $185.00, or $591.90 a month. And those with incomes more than $394,000 will pay $443.90 in IRMAA and the standard $185.00, or a total of $628.90 a month.
The increases are “mainly due to projected price changes and assumed utilization increases that are consistent with historical experience,” the CMS said.
Mary Johnson, an independent Medicare and Social Security policy analyst, said that while the annual growth rate of Part B premium is about average for the past decade, it’s slightly lower than the 2.8% average rate of growth in the cost-of-living adjustments over the same period.
“The Part B premium is growing by 5.9%, but the COLA will only increase checks by 2.5%,” she said, adding that a growing share of senior’s Social Security checks is being consumed by Part B premiums. Part B premiums are automatically deducted from beneficiaries’ Social Security check.
Additionally, the CMS said costs for the roughly 1% enrolled in Medicare Part A also will increase. Part A covers inpatient hospitals, skilled nursing facilities, hospice, inpatient rehabilitation, and some home health care services.
Most people don't pay a monthly Part A premium because they or a spouse paid Medicare taxes while working, the CMS said. Those who did not pay Medicare taxes may be able to buy into Part A, as long as they sign up for Part B. The Part A premium in 2025 will be $285, a $7 increase from 2024. The CMS also noted that some uninsured individuals and those with disabilities who have exhausted other entitlements will pay the full premium of $518 a month in 2025, a $13 increase from 2024.
The deductible for hospital stays up to 60 days will be $1,676, up $44 from 2024. If the hospital stay exceeds 60 days, beneficiaries will pay a coinsurance amount of $419 per day through day 90, as compared to $408 in 2024.