Millions of older Americans rely on Medicare for healthcare coverage in retirement. But unfortunately, the cost of Medicare is by no means set in stone.

Each year, Medicare costs have the potential to rise, and 2025 will be no exception. Here’s what retirees are in for.

Image source: Getty Images.

Part B is going up

In 2025, the standard monthly Medicare Part B premium is rising from $174.40 to $185, an increase of $10.30 per month. That by itself isn’t terrible.

The problem, though, is that Social Security benefits are only rising by 2.5% in the new year. This means an increase this large in the cost of Medicare Part B is going to leave millions of seniors with less of a monthly boost.

In addition to Medicare Part B’s standard monthly premium costing more, the annual Part B deductible is increasing from $240 to $257. That extra $17 may not break your budget, but it’s yet another uptick to grapple with.

Part A costs are rising, too

You may not have to pay a premium for Medicare Part A coverage. Most enrollees don’t. But the cost of receiving care under Part A is increasing in 2025.

The Part A inpatient hospital deductible is rising from $1,632 to $1,676. And that only covers the first 60 days of a hospital stay.

Beyond that, the cost of days 61 through 90 is rising from $408 per day to $419. And the cost of using reserve days beyond the 90-day mark is increasing from $816 per day to $838.

The cost of skilled nursing care, which Part A also covers, is increasing as well. For days 21 through 100 in a nursing facility, the daily coinsurance rate is rising from $204 to $209.50.

Will you pay a surcharge on your Medicare premiums in 2024?

As mentioned, the standard monthly Medicare Part B premium will be $185 in 2025. But if you’re a higher earner, you may be subject to a surcharge known as an income-related monthly adjustment amount, or IRMAA. Consult this table to see if an IRMAA will apply to you next year.

Data source: CMS.gov. Table by author.

That said, IRMAAs are based on your income from two years prior, so you can’t necessarily use your 2024 income as a benchmark.

You should also know that IRMAAs apply to Part D drug plans. Since there’s no standard monthly Part D premium, it’s hard to pinpoint what you’ll pay for coverage if you meet these thresholds. But here are the surcharges you’ll be looking at.

Data source: CMS.gov. Table by author.

It’s important to know what Medicare increases you’re looking at, even if you have access to a generous retirement income. Pay attention to these numbers, so there are no unpleasant surprises once the new year kicks off.

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