Big changes are ahead for seniors as a huge Medicare Part B premium hike is on the horizon for 2025—and it could hit your wallet hard.

Here’s what you need to know before it impacts your budget.

Understanding the surge in Medicare Part B premiums​

The Centers for Medicare and Medicaid Services (CMS) has announced that the standard monthly premium for Medicare Part B enrollees will rise by $10.30 to $185.00 in 2025, up from $174.70 in 2024.

To put this into perspective, the premium was $164.90 in 2023.

Additionally, the annual deductible for all Medicare Part B beneficiaries will see an uptick to $257 from $240 in the previous year.

These increases are attributed to projected costs and usage increases, according to CMS.


Why this hits harder than expected
The sting of this increase is felt even more acutely as it outpaces both inflation, which rose 3.2% in October, and the Social Security cost-of-living adjustment (COLA) for 2025, which is set at 2.5% or an average of $50 more per month.

Mary Johnson, an independent Social Security and Medicare policy analyst who is also a beneficiary at age 73, points out the crux of the issue: “When Part B premiums grow at a faster rate than Social Security COLAs, premium costs consume a growing portion of monthly Social Security checks.”

The impact on high-income beneficiaries​

Medicare Part B monthly premiums are income-based, and those affected by the Income-Related Monthly Adjustment Amount (IRMAA) will feel the pinch.

Roughly 8% of people with Medicare Part B fall into this category.

Here's a breakdown of what high-income beneficiaries can expect to pay:

• Individuals with a modified adjusted gross income of $106,000 or less will pay the standard premium of $185.00 per month.
• Those earning more than $106,000 and less than $394,000 will pay an additional IRMAA of $406.90 plus the standard $185.00, totaling $591.90 monthly.
• For incomes of $394,000 or more, the IRMAA is $443.90 plus the standard premium, bringing the monthly total to $628.90.

A troubling trend over time​

This isn't a new phenomenon.

Data shows that Medicare Part B premiums have consistently risen faster than COLA for years.

From 2005 to 2024, Part B premiums increased by an average of 5.5% per year, while COLAs averaged just 2.6%.

Johnson explains that “the disparity is caused in part because Medicare costs are not included in the consumer price index that’s currently used to calculate the COLA.”

When will the new premiums take effect?​

For those already receiving Social Security benefits, the new 2025 Part B premium will typically be automatically deducted from Social Security checks starting in January.

Those not on Social Security will need to adjust their payments to account for the new rate at the beginning of the year.

A closer look at Medicare Part B​

Medicare Part B is a critical component of senior healthcare, covering physicians' services, outpatient hospital services, certain home health services, durable medical equipment, and more.

It's a counterpart to Medicare Part A, which covers inpatient hospital stays and other services, and is typically premium-free for those with sufficient Medicare-covered employment history.

In a related story, learn about the upcoming changes to Medicare Part D in 2025 here.
Have you started feeling the impact of rising healthcare costs? How are you planning to adjust your budget to accommodate the 2025 Medicare Part B premium increase? Share your thoughts and strategies with us in the comments below.