American seniors will pay more for their health care this new year, as the Centers for Medicare and Medicaid Services (CMS) announced that premiums for their Part B plan will increase by about 6% in 2025.

Part B includes visits to doctors, outpatient care, preventive services such as vaccines, medical equipment such as wheelchairs, and home health care. (Part A, which covers inpatient care in hospitals and other institutions, is premium-free for all but about 1% of beneficiaries because of taxes paid by most retirees while they worked.)

What is the Medicare Part B premium for 2025?

The standard monthly premium for Medicare Part B participants will increase by $10.30, or about 6%, to $185.00, from $174.70 in 2024, CMS said Friday.

Meanwhile, the annual deductible for all Medicare Part B beneficiaries will increase from $240 to $257 in 2025.

The reason for the premium and deductible increases for 2025 is due to “projected price changes and assumed utilization increases that are consistent with historical experience,” according to the Centers for Medicare & Medicaid Services.

The premium was $164.90 in 2023, while costs fell just over $5 from the previous year. a rare one reject.

How does that relate to social security COLA?

Medicare’s Part B premiums have generally been higher than inflation and Social Security’s annual cost-of-living adjustment (COLA).

Annual inflation rose 2.4% in Septemberwhile Social Security will be COLA for next year 2.5%or an average of $50 more per household.

What do higher income Medicare enrollees pay?

Since a beneficiary’s monthly Part B premium is based on a person’s income, wealthier Americans also pay an Income-Related Monthly Adjustment Amount, or IRMAA, which affects about 8% of those with Medicare Part B, according to CMS.

• Those who are married and living with their spouses at any time during the year but file separate tax returns with an adjusted adjusted gross income of $106,000 or less will pay only the Medicare Part B premium of $185.00 per month.
• Beneficiaries with incomes of more than $106,000 but less than $394,000 will pay IRMAA of $406.90 plus the standard $185.00, or $591.90 per month.
• Seniors with incomes over $394,000 pay IRMAA $443.90 and the standard $185.00, or a total of $628.90 per month.

How does this affect social security benefits?

Medicare enrollees who already receive Social Security benefits can expect the new 2025 Part B premium to be automatically deducted from their Social Security checks in January.

Those who are not yet receiving Social Security benefits but are paying Medicare Part B every month should make sure they pay the increased amount starting in January.