As we approach 2025, many people on Medicare are starting to ask: Are Medicare premiums going up in 2025? While it’s too early to know the exact numbers, one thing is almost certain: Yes, Medicare premiums are likely to increase in 2025.
But why do premiums go up? And how can you prepare for these changes? Let’s explore the factors that influence Medicare premiums and what you can do to stay ahead of rising costs.
Why Do Medicare Premiums Increase?
There are several reasons why Medicare premiums tend to go up over time. Here are the main factors:
- Rising Healthcare Costs: As the cost of healthcare services, prescription drugs, and medical procedures increase, so does the amount Medicare needs to cover. To keep up with these rising costs, Medicare adjusts its premiums every year.
- Inflation: Just like groceries, gas, and other necessities, healthcare prices are affected by inflation. Medicare premiums typically rise in line with inflation, reflecting the overall increase in the cost of living.
Legislation: Government policy changes can also impact Medicare premiums. For example, new laws that expand Medicare coverage or limit out-of-pocket costs for beneficiaries may lead to higher premiums to offset the additional expenses.
Historical Trends in Medicare Premiums
Looking back at the last few years can give us some clues about what to expect in 2025. For instance, the standard Medicare Part B premium increased from $144.60 in 2020 to $170.10 in 2022. While the exact increase for 2025 won’t be announced until late 2024, the trend suggests that premiums will continue to rise.
It’s also important to note that Medicare Advantage (Part C) and Part D (prescription drug) premiums can vary by plan and location. If you’re enrolled in one of these plans, you may see different changes in your premiums compared to those with Original Medicare.
Income-Related Adjustments
If you have a higher income, your Medicare premiums may be subject to the Income-Related Monthly Adjustment Amount (IRMAA). This means that if your income exceeds certain thresholds, you’ll pay higher premiums for Medicare Part B and Part D.
For example, if you’re single and earn more than $97,000 or married with an income over $194,000, you’ll likely pay more for your Medicare premiums. The higher your income, the more you’ll pay in IRMAA surcharges.
How to Prepare for Medicare Premium Increases
While you can’t avoid premium increases, there are steps you can take to mitigate their impact:
Monitor Your Income: If you’re close to the IRMAA income threshold, consider working with a financial planner to manage your income and avoid higher premiums. Reducing taxable income through retirement contributions or other strategies could help you stay below the IRMAA threshold.
Review Your Plan Annually: Each year, Medicare beneficiaries can review and change their coverage during the Open Enrollment Period (October 15 to December 7). This is the perfect time to compare your current plan with others and ensure you’re still getting the best deal.
Consider Switching to Medicare Advantage: If your premiums are rising significantly, switching to a Medicare Advantage plan might help you save money. Many Advantage plans have lower premiums and offer additional benefits, like dental and vision coverage.
Let Insura Help You Prepare
At Insura, we’re committed to helping you navigate the complexities of Medicare, including rising premiums. Whether you need help reviewing your current plan, comparing Medicare Advantage options, or understanding how income impacts your premiums, we’re here to assist you.
We offer both in-person meetings and live Zoom calls for those in Oregon, Washington, and Texas. Don’t wait until 2025 to be caught off guard by higher premiums — let’s review your coverage now and make sure you’re prepared for any changes.Book your consultation today at GetInsura.com and stay ahead of rising Medicare costs.
