Seniors receive both good and unpleasant news. The good news is that they have gotten a cost of living rise in their Social Security benefits. However, the bad news is that Medicare has also increased its cost. CMS has announced that Part B plan prices will rise by 6% in 2025.
Enrolling in Part B will automatically withdraw the expense from your Social Security check.
Medicare is broken into four components.
- Part A, which covers inpatient care in hospitals and other facilities, is premium-free for all but about 1% of beneficiaries due to taxes paid by most retirees while they worked.
- Part B, which covers visits to doctors, outpatient care, preventative services such as vaccines, medical equipment like wheelchairs as well as home health care carries a cost. Although it is much lower than paying out of pocket or through a private insurance company without the support of a company or CMS, beneficiaries will still need to pay a monthly fee to be able to access this service.
- Part C, better known as Medicare Advantage plan, is offered by Medicare-approved private companies, most include drug coverage (Part D). Each company will offer their services in different parts of the country, with different prices and coverages depending on a multitude of factors.
- Part D helps cover the cost of prescription drugs (including many recommended shots or vaccines). Plans that offer Part D drug coverage are run by private insurance companies that follow rules set by Medicare. You can purchase Part D independently.
Most retirees choose Part B over Part C due to its lower cost compared to insurance companies for most Americans. Parts A and B cover most services, allowing retirees to live a healthy and happy life, especially when combined with Part D for individuals who use multiple drugs.
What is the Medicare Part B premium for 2025?
The CMS said on Friday that the standard monthly premium for Medicare Part B enrollees will increase by $10.30, or approximately 6%, to $185.00 from $174.70 in 2024. In 2025, all Medicare Part B beneficiaries will have an annual deductible of $257, up from $240. The CMS explains that retirees should not be surprised by the hike, which is due to “projected price changes and assumed utilization increases that are consistent with historical experience.”
Contrary to popular belief, Medicare prices do not increase year. In 2023, the premium for Part B was $164.90, over $5 lower than the previous year.
Medicare Part B monthly premiums are dependent on income, resulting in an additional Income-Related Monthly Adjustment Amount (IRMAA) for individuals in higher income levels. According to CMS data, this affects around 8% of Medicare Part B enrollees.
Married persons filing separate tax returns with a modified adjusted gross income of $106,000 or less are only required to pay the standard Medicare Part B premium of $185 per month. Individuals with salaries between $106,000 and $394,000 will pay an IRMAA of $406.90 in addition to the $185 premium, totaling $591.90 monthly. Seniors earning more over $394,000 will have an IRMAA of $443.90, resulting in a total monthly payment of $628.90 including the normal premium.
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