In 2025, America’s seniors will see a 2.5% increase in their Social Security benefits due to the annual cost-of-living adjustment. This change aims to help recipients keep pace with rising costs. However, there’s more to consider when it comes to healthcare expenses in the upcoming year.
Alongside the Social Security increase, seniors should prepare for higher healthcare costs as the Centers for Medicare and Medicaid Services (CMS) has announced a significant rise in premiums for Medicare’s Part B plan. The premiums are expected to go up by about 6% in 2025.
Understanding Medicare Part A and Part B Costs and Coverage
It’s important to note that while Part A covers inpatient care in hospitals and other facilities, it remains premium-free for the majority of beneficiaries. Only about 1% of individuals are required to pay for Part A, due to taxes paid during their working years.
Medicare Part B is an essential component of healthcare coverage for seniors, providing support for:
- Doctor visits
- Outpatient care
- Preventative services, such as vaccines
- Medical equipment, including wheelchairs
- Home health care
For those enrolled in Medicare Part B, the standard monthly premium will increase from $174.70 in 2024 to $185.00 in 2025, reflecting a $10.30 rise. This 6% increase highlights the need for beneficiaries to budget for higher healthcare expenses moving forward.
The annual deductible for all Medicare Part B beneficiaries is set to increase to $257 in 2025, up from the current $240.
Understanding the Increase
The Centers for Medicare & Medicaid Services have cited “projected price changes and assumed utilization increases consistent with historical experience” as the reason for the upcoming rise in premiums and deductibles for 2025. In 2023, the premium was $164.90, marking a rare decrease of just over $5 from the previous year.