2025 Medicare Part B Premium Hike Surpasses Social Security COLA and Inflation Rates

Next year, seniors will face higher costs for Medicare Part B, reports the Centers for Medicare and Medicaid Services (CMS).

In 2025, the standard monthly premium for Medicare Part B will increase by $10.30 to $185.00, up from $174.70 in 2024, according to a recent announcement by CMS. The premium was previously $164.90 in 2023. Additionally, the annual deductible for Medicare Part B participants will rise to $257, a jump from $240 in 2024. These increases are primarily driven by anticipated rises in costs and demand, explained CMS.

The rise in the Medicare Part B premium for 2025 exceeds both the rate of inflation and the Social Security cost-of-living adjustment (COLA). In October, annual inflation was reported at 3.2%, while the COLA for 2025 is set at 2.5%, which translates to an average monthly increase of $50 in Social Security benefits.

“The increasing disparity between Part B premiums and Social Security COLAs means that a larger portion of an individual’s monthly Social Security income will go towards covering premium costs,” noted Mary Johnson, a Social Security and Medicare policy analyst who, at 73, is also a recipient of these benefits.

Increased Costs for Wealthier Beneficiaries

For beneficiaries whose earnings are higher, the monthly premium for Medicare Part B includes an additional charge known as the Income-Related Monthly Adjustment Amount (IRMAA). This affects about 8% of those enrolled in Medicare Part B, stated CMS.

“While most people receiving Social Security who are 65 and older will have sufficient benefits to cover the $10.30 increase in Part B premiums from $174.70 to $185.00, those who face higher premiums due to their income will not,” Johnson said.

CMS detailed that for beneficiaries who are married and lived with their spouses at any point during the year, but who file separate tax returns, with a modified adjusted gross income of:

• $106,000 or less will pay only the standard Medicare Part B premium of $185.00 per month
• More than $106,000 and less than $394,000 will pay an IRMAA of $406.90 in addition to the standard $185.00, totaling $591.90 each month
• $394,000 or more will pay $443.90 in IRMAA plus the standard $185.00, for a monthly total of $628.90.

Long-Term Trend: Rising Medicare Part B Costs

The 2025 increase is not an isolated event. Over the years, Medicare Part B premiums have consistently risen faster than the COLA, according to data. From 2005 to 2024, the average annual increase in Part B premiums was about 5.5%, while the COLAs averaged just 2.6%, according to Johnson’s research.

“This discrepancy is partly due to Medicare costs not being considered in the consumer price index that calculates the COLA,” Johnson explained. During that period, there were only four instances when Part B premiums did not increase, three times under President Barack Obama (2009, 2014, and 2015) and once under President Donald Trump in 2018. Despite these few instances, significant premium hikes have occurred under each recent presidential administration, including George W. Bush, Obama, Trump, and Joe Biden, she added.

Implementation of New Medicare Part B Premiums

For current Social Security recipients, the new Medicare Part B premium for 2025 will generally be automatically deducted from their Social Security checks starting in January.

Those not yet receiving Social Security benefits and who pay Medicare Part B directly will need to adjust their payments to the new amount beginning in January.

Understanding Medicare Part B

Medicare Part B covers physician services, outpatient hospital services, certain home health services, durable medical equipment, and other medical and health services not covered by Medicare Part A.

Part A, in contrast, covers inpatient hospital stays, skilled nursing facilities, hospice care, inpatient rehabilitation, and some home health care services. CMS notes that about 99% of Medicare beneficiaries do not pay a premium for Part A due to having at least 40 quarters of Medicare-covered employment.

In 2025, the inpatient hospital deductible for Part A will increase by $44 to $1,676, up from $1,632 in 2024. For those who haven’t qualified for premium-free Part A, the full monthly premium will be $518, a $13 increase from 2024.