Parents waiting for an increase in their Social Security checks next year may be dismayed to discover that the extra money has already been talked about.
The Centers for Medicare and Medicaid Services (CMS) announced that the 2025 monthly Part B premium will rise to $185, an increase of $10.30 from $174.70 in 2024. An increase of $17, or 7%, to $257 from $240.
The news follows the Social Security Administration’s announcement of a 2.5% cost-of-living adjustment (COLA) for 2025, which will add about $50 to the average monthly benefit of $1,900, according to the SSA.
Ideally, allowances in benefits will provide some breathing room for more than 72 million retired senior citizens and disabled workers who grappled with higher prices in the new year.
Next year, maybe not.
“This marks the second year in a row where Part B premiums have increased by nearly 6%,” Mark Miller, retirement expert and author of “Retirement Reboot,” told Yahoo Finance.
“A high dollar amount will increase the Social Security COLA for seniors,” he said. “The pressure will be most painful for those with lower benefits.”
For example, Miller said, someone earning $1,200 a month in benefits would see their COLA reduced to 1.6% if the Medicare increase is taken into account.
In addition, the Medicare Part A deductible paid by the beneficiary if admitted to the hospital will be $1,676 in 2025, an increase of $44 from $1,632 in 2024. The amount of coins for hospital and skilled nursing care will also rise by 2.7 percent.
Not everyone will feel the pinch. Under Social Security’s “harmless” rule, a person’s Part B premium increase cannot be greater than the COLA. People who receive less than $415 in monthly Social Security benefits will not be charged the full Part B premium increase, according to Phil Moeller, Medicare and Social Security expert author of the book, “Getting What You Get for Medicare.”
Generally, people receiving Social Security benefits are notified by mail in early December of the new benefit amount. Most beneficiaries can also view COLA notices online through their personal Social Security account at ssa.gov/myaccount/.
Read more: How to find out about the 2025 Social Security COLA increase
Since 2007, beneficiaries’ monthly Part B premiums have been based on their income. About 8% of Medicare users earn too much to meet the standard Part B and Part D premiums and must pay an additional fee, known as the Income-Related Monthly Adjustment Amount (IRMAA). Details can be found in the CMS fact sheet.
This year, Medicare beneficiaries with incomes over $106,000 (for single filers), $212,000 for joint filers and $106,000 (for married people filing separately) will pay additional fees. For these beneficiaries, the total monthly Part B premium ranges from $259 to $628.90.
Your eligibility is determined by the Social Security Administration. Additional fees are calculated on a sliding scale with the top five income brackets at $500,000 and $750,000 for individual and joint filings. These numbers change every year with inflation.
The calculations have a delay of two years. Whether you pay additional fees in 2025 depends on the income shown on your 2023 tax return.
“Unfortunately, it’s easy to trigger IRMAA when you first retire because the feature looks back two years,” Miller said. “It’s also easy to run into additional costs if you’re enrolled in Medicare but still working full time. This is a feature of Medicare that really angers retirees — and for good reason. You pay more for health insurance but don’t get any additional benefits.
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Medicare premiums set to rise in 2025. (Getty Creative) ·Bill Oxford via Getty Images
If you haven’t checked your Medicare coverage for next year, maybe an emergency deadline can help. There’s still time to shop around to save on Medicare coverage. Open enrollment for 2025 is underway, ending December 7. If you’re eligible for Medicare, you can compare your 2025 coverage options among Original Medicare, Medicare Advantage, and Part D prescription drug plans.
Medicare’s online searchable Plan Finder on the Medicare.gov site allows you to review your plan options. If you have limited income, you may be eligible for Medicare Supplemental Assistance, which covers Part D premiums and deductibles and reduces drug costs. Free one-on-one counseling is available through the state’s Health Insurance Assistance Program (SHIP).
“It’s very important to review your plan this year,” Juliette Cubanski, deputy program director for Medicare policy at KFF, previously told Yahoo Finance.
“We’re seeing some changes not only in terms of premiums, but in terms of cost sharing, deductibles, and aspects of coverage that can affect what people pay, but also their ability to access the drugs they need,” she said.
Kerry Hannon is a Senior Columnist at Yahoo Finance. He is a career and retirement strategist, and the author of 14 books, including “In Control at 50+: How to Succeed in the New World of Work” and “Never Grow Old To Be Rich.” Follow him in X @kerryhannon.
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