Well, 2025 is only 45 days away (at the time of this writing on November 17^th) and with it changes to your Social Security check and Medicare premiums and cost shares. Depending on how you receive Medicare, will determine how these affect you. If you are on Original Medicare, hospital coinsurances and Part-D premiums will affect you; if you are on Medicare Advantage, coinsurances and copays will affect you – regardless of which you receive, the Part-B premium will affect everyone. Let’s take a look at:

• COLA (Cost of Living Allowance)
• Part-B premiums and IRMAA (Income Related Monthly Adjusted Amount)
• Part-A deductibles and coinsurance amounts
• Part-D premiums and IRMAA (Income Related Monthly Adjusted Amount)

COLA (Cost of Living Allowance)

Every year, the government calculates a COLA increase based on the current year’s third quarter’s inflation rate (July through September), measured against the Consumer Price Index and how it compares to the previous year’s third-quarter CPI. The CPI is a benchmark based on a basket of goods and services that are common to everyday living expenses. The government tracks inflation on:

• Food and beverages
• Housing and utilities
• Apparel (clothing)
• Transportation
• Medical care
• Recreation
• Education
• Communication expenses (phone and Internet costs)
• And some other goods and services like water, sewage, tolls, etc.

In essence, this is to ensure income tied to the government’s payroll stays in sync with inflation (Social-Security and disability benefits, military pay, veterans’ pensions and service-connected disability payments, federal government workers, Et Al.). If it did not do this, one’s income would eventually be worth a fraction of a dollar, losing buying power.

For 2025, the COLA increase will be 2.5%. An easy way of calculating what you will get, for every $100 you earn, add $2.50. That will give you a close estimate. If we take the average Social-Security check of $1,783.55 (according to Bankrate.com) and multiply if by 2.5%, you would receive an increase of $44.59 monthly, or $535.07 for the year.

The Government Giveth and Taketh Away: The Part-B Premium Increase for 2025

According to Generative AI (the references were many to cite all, so I recommend search yourself for “How many Social Security beneficiaries receive $1,200 a month or less?” or just click here.) 80% of all beneficiaries are receiving $1,200 or fewer dollars per month. At $1,200, the COLA increase will be $30, with $10.30 being taken back by the government for the Part-B premium increase for 2025.

Part-B will increase by $10.30, from $174.70 to $185 per month, if you earn below $106K as a single person; $212K if a married couple filing jointly. If you earn more, then based on your income, your Part-B premium will increase. This is called Income Related Monthly Adjusted Amount (IRMAA). See table below.

Part A Deductibles and Coinsurance Amounts

There are fewer and fewer people on Original Medicare only; the majority on Original Medicare either have a Medicare Supplement or are on a secondary insurance option like TriCARE For Live or CHAMPVA, which pays these deductibles and coinsurances. With that said, I come across people only on Original Medicare frequently. If this is you, reach out to us and learn how you can avoid the high risk of these deductibles and coinsurances.

As you can see below in the table, for 2025 the Inpatient Hospital deductible will be $1,676.00.

What does this mean for you?

If you were on Original Medicare and were hospitalized, regardless of whether you were in the hospital for one day or 60, you will pay $1,676.00. Now this is where it gets super expensive, if you were to go over 60 days, you will be charged $419 PER DAY for the next 30 days (90 days in total) coinsurance. If for some reason you went past 90 days, you will be dipping into your lifetime reserve days, of which you only get 60 (a total of 150 days lifetime with Original Medicare), the charge doubles to $838 PER DAY for days 91 through 150.

FYI: If you are on a Medicare Advantage plan, this 150 lifetime days quota does not apply. Most plans will provide unlimited days for in-patient hospital stays, and your copay covers all costs.

Skilled Nursing Costs

Original Medicare provides 20 days of skilled nursing at $0 cost and provides a total of 100 lifetime days. From days 21 through 100, it will cost you $209.50 per day.

FYI: Depending on the Medicare Advantage plan, every benefit period provides a new round of 100 days for skilled nursing. Read the Evidence of Coverage pertaining to your specific plan for details. A benefit period is a 60-day window that commences the first day you are hospitalized, and it is coded for whatever reason you were admitted. If you were to be discharged and returned to the hospital within 60 days, for the same reason, you will not owe what you’ve already paid in copays for this period. For more information on Benefit Periods and how they work, click here.

There are more changes not covered in this article (E.g. the Inflation Reduction Act and its affect on Part D and Medicare Advantage plans as a whole, the premium stabilization demonstration assistance given to Part-D plan carriers, to minimize the first year’s impact on prescription drug plan premiums, the M3P [Medicare Prescription Payment Plan], etc.). If you would like more information, click here for a video presentation explaining in detail these very important changes, and how they will affect you.

Finally, if you are confused (which is very easy to be and you are in good company if you are), have concerns or questions, or need direction to find assistance, please reach out to us. We are a Fiduciary Agency and a Registered Social Security Analyst (RSSA) organization, and can help you with Medicare, Social Security and other various government programs, and there is never a fee for our consultation. We are also a member in good standing of the Better Business Bureau. Contact Us Here!