2025 Medicare Part B Premium Hike: That is nearly five times more money being outpaced by social security COLA and inflation.
Even compared to the seniors from 2019, those in 2025 find it more of a challenge to finance their costs because Medicare Part B premiums have risen again. Per the CMS, the monthly base premium for Medicare Part B will increase from $174.70 in 2024 to $185.00, an increase of $10.30. This is an increase from $164.90 in 2023. Also, Part B beneficiaries, which presently pay $240 per year in annual deductible, will pay $257 per year yearly starting the next year.
CMS also blames these hikes in projected rise in healthcare costs and consumption. But more worrying is the fact that these escalating premiums are far ahead of both inflation and the Social Security COLA. The annual inflation rates over the year to October 2022 will be 3.2%; the COLA for 2025 will be 2.5% which will increase the average Social Security check by $50 per month.
“To my dismay, there was a rise in the income gap between the current seniors and the younger generation,” Mary Johnson, an independent policy analyst who focuses on Social Security and Medicare, said. “When Part B premiums rise at an annual rate that is higher than Social Security COLAs, the share of premium costs in monthly Social Security benefits escalates,” Johnson added, who noted that he directly faces increased costs adds Johnson, 73.
Rich Americans say they are starting to feel the pinch.
While most Medicare Part B enrollees pay a standard premium amount, high earners face an additional charge through the IRMAA. IRMAA currently affects approximately 8 percent of Part B beneficiaries, as estimated by CMS. Here’s a breakdown of the projected monthly costs for married beneficiaries filing separate tax returns:
Income of $106,000 or less: Standard premium of $185.00 per month.
Income between $106,000 and $394,000: IRMAA of $406.90, the total monthly premium of $ 591.90.
Income above $394,000: Primary premium of $184.90 plus an IRMAA of $443.90 equals $628.90 monthly premium cost.
For those premium-paying through income, the $10.30 increase in the standard premium is just a part of any financial jigsaw puzzle. “While most of the Social Security beneficiaries aged 65 and older will see bigger benefits that would be sufficient to accommodate the increase, the same cannot be said of people who pay higher premiums based on income,” Johnson pointed out.
A Growing Financial Burden
The increasing premiums make some elderly people worried about how they are going to receive adequate medical attention, given that most are earning fixed incomes, and the cost of medical bills is expectantly bound to rise. Due to this, they are stuck with less money to spend on other important uses, with COLA failing to measure up.
Both of these increases provide cogent evidence for individuals to begin planning for their retirement financially and for policymakers to continue to debate the issue of the costs of health care for seniors. For now, the bondholders shall wait for the realization that they will have to dig deeper into their pockets for out of pocket expenses and plan on how the expenses will affect their monthly expenditures.
Medicare Part B Costs Outpacing COLA: An Issue That Has Always Existed for the Elderly
That the cash pinch that many seniors experience as Medicare costs go up is not new is something that remains unchanged. Part B premiums in Medicare have been steadily increasing for years in ways that greatly exceed COLA. The numbers all point to one ugly reality, which is that many older people in the US are still hard-pressed to make ends meet.
A breakdown by Mary Johnson revealed that from 2005 to 2024, the cost of Medicare Part B increased at an average rate of 5.5 percent annually, much higher than the 2.6 percent annual COLAs on average. On this front, there is a conflict that in part arises from the way COLA is determined. “However, Medicare costs are not reflected in the overall costs as represented by the consumer price index utilized to determine COLA,” Johnson stated. Therefore, the escalating cost of health that seniors are subjected to is not well offset by the corresponding rise in social security.
The Growth of Premiums
Year after year, Part B premiums have rarely remained constant and are expected to do so in the forthcoming years as well. There have only been four years since 2005 that saw premiums not increase – and only three out of the past decade in particular: Obama’s second term in 2014, and his last year in office in 2015. The fourth pause was observed during Donald Trump presidency in 2018.
But these pauses can be considered violations of the rule. Specifically, double-digit premium hikes have arisen under every past president, George W. Bush, Obama, Trump, and now Biden, adding to seniors’ costs.
What Seniors Need to Know about Changes in 2025
Thus, beginning in January 2025, this new Medicare Part B premium will be reflected in seniors’ bills. For those who are already Social Security payment recipients, the increased premium will be taken out of their checks. Nonetheless, people who have not yet reached the age for receiving Social Security but pay the Medicare Part B premium themselves will have to check whether they should change something.
Understand other Medicare Part B Costs
The federal health insurance program for people aged 65 or older and other individuals with disabilities is divided into parts. Part B, to be more precise, deals with physicians’ services, outpatient hospital care, DME, and the other services not entailed in part A.
On the other side of the same coin, Medicare Part A deals in inpatient hospitalizations, skilled nursing facilities, and hospice, among other services, and compassed limited home health services. Many individuals—about 99 percent—do not pay a Part A premium because they have enough work credits covered by Medicare. However, for individuals and spouses who have less than 40 quarters of work, the full monthly Part A premium will rise to $518 each in 2025, up $13 from 2024.
As it is well elaborated above, premiums are not the only thing on the rise; deductibles are as well. The Part A inpatient hospital deductible will rise by $44 to $1,676 in 2025, from $1,632 in 2024. Such changes also add to the fact that beneficiaries under Medicare finance much of this program themselves.
A Call for Greater Support
The concern rises because besides food, the other basic need that takes a lion’s share of patients’ expenditures is still on the rise, and the cost of health care is still escalating, eradicating COLA. It has become so bad that premiums and deductibles have also started to climb, and there could not have been a more appropriate time to come up with better and more encompassing methods of computing COLA. Closing this gap may offer some respite to millions of elderly people depending on Medicare and Social Security for survival.
