Seniors To Pay More For Medicare
Starting January 1, 2025, Medicare beneficiaries will face higher costs and see other changes to the federal insurance program plans. One of the most talked-about changes is the roughly six percent increase in the Medicare Part B premium plan.
In 2025, more than 67 million seniors will see their standard monthly premium rise from $174.70 to $185.00. Additionally, the annual deductible for all Medicare Part B beneficiaries will increase from $240 to $257. After meeting their deductible, beneficiaries usually pay 20 percent of the cost for each Medicare-covered service or item.
The Centers for Medicare and Medicaid Services (CMS) announced the Part B changes in November, stating in a news release that the Part B increases are “mainly due to projected price changes and assumed utilization increases that are consistent with historical experience.”
Medicare enrollees with higher incomes will see further increases in their Part B plan. The standard monthly premium amount that beneficiaries pay for Part B depends on their income. Medicare beneficiaries with higher incomes are subject to the Income-Related Monthly Adjustment Amount (IRMAA), regardless of whether they are enrolled in Original Medicare or a Medicare Advantage plan.
IRMAA is a surcharge on the standard monthly premiums for Medicare Part B and Part D. The Social Security Administration determines IRMAA annually using income tax information from two years prior. IRMAA affects about eight percent of those with Medicare Part B.
According to CMS, in 2025:
- Medicare beneficiaries who are single or are married and file separately and earn $106,000 or less, and married couples who file jointly and earn $212,000 or less will pay the standard Part B Premium of $185.
- Beneficiaries with incomes between $106,000 and $394,000 will pay $406.90 in IRMAA plus the standard $185.00 premium, or $591.90 a month.
- Beneficiaries with incomes above $394,000 will pay $443.90 in IRMAA and the standard $185.00 or a total of $628.90 a month.
Part B is one of the four main parts of Medicare, which provides federal health insurance for individuals aged 65 and older, as well as people under 65 who have certain disabilities or conditions. The four main parts of Medicare are:
- Part A helps to cover inpatient care in hospitals, stays in skilled nursing facilities, some home health care, and hospice services.
- Part B covers a variety of medical services and equipment, including outpatient care, such as doctor’s office visits, tests, scans, and preventive care, such as vaccines and wellness visits; some home health services; ambulance services; and durable medical equipment, such as medically necessary walkers, wheelchairs, and oxygen tanks.
- Part C, also known as the Medicare Advantage Plan, is a Medicare-approved plan from private insurance companies that offers an alternative to Original Medicare. Medicare Advantage bundles Part A, Part B, and usually Part D.
- Part D helps cover the cost of prescription drugs. Beneficiaries who have Original Medicare can get Part D by joining a Medicare drug plan or a Medicare Advantage plan.
Medicare Part A Costs Are Also Increasing
Most Medicare beneficiaries do not pay a monthly premium for Medicare Part A. However, those who pay a full Part A premium will pay $518 a month in 2025, a $13 increase from $505 in 2024.
While most beneficiaries may not pay a monthly Part A premium, they are required to pay a deductible if they are admitted to the hospital. According to CMS, the Part A deductible will increase by $44, from $1,632 in 2024 to $1,676 beginning in 2025. If the hospital stay lasts longer than 60 days, beneficiaries are required to make a coinsurance payment of $419 per day until day 90. This amount was $408 in 2024.
Medicare Part D Cap Benefits All Medicare Enrollees
There’s good news for all Medicare beneficiaries with Part D plans, whether they have a standalone prescription drug plan or a Medicare Advantage plan with prescription drug coverage.
For the first time, beginning Jan. 1, 2025, Part D out-of-pocket costs will be capped at $2,000, regardless of a beneficiary’s income level, the CMS said. The cap is the result of the Inflation Reduction Act (IRA) of 2022. Placing a spending limit on prescription drugs is expected to help enrollees with high drug costs.
AARP, which has been advocating for lower prescription drug prices for decades, reports that 3.2 million Medicare Part D enrollees are estimated to benefit from the new out-of-pocket prescription drug cap in 2025.
What’s more, CMS said that the average monthly premium for a Medicare Part D plan is expected to decrease to $40 in 2025 from $41.63 in 2024. However, some plan premiums are expected to increase.
Similar to Part B premiums, some beneficiaries with higher incomes will pay more for their Part D monthly premiums. According to CMS, beneficiaries with incomes ranging from $106,000 to $133,000 will pay an additional charge of $13.70 for their monthly Part D premium.
Source Links:
https://www.cbsnews.com/news/medicare-part-b-premium-2025-social-security/?ftag=CNM-00-10aac3a
https://data.cms.gov/summary-statistics-on-beneficiary-enrollment/medicare-and-medicaid-reports/medicare-monthly-enrollment
https://www.medicare.gov/basics/get-started-with-medicare/medicare-basics/parts-of-medicare
https://www.aarp.org/health/medicare-insurance/info-2024/medicare-part-b-premium-increase.html
https://www.medicare.gov/publications/11579-medicare-costs.pdf
