With the year 2025 looming, some fairly major changes are going to start coming into play for Medicare beneficiaries. These changes most specifically involve premiums and deductibles related to Medicare Part A. For this reason, seniors and persons with disabilities will want to take a closer look at these changes to see their impact on this vital health insurance program.
Overview of Medicare Part A
Generally, Medicare Part A covers expenses incurred for inpatient stays in a hospital, care in a skilled nursing facility, hospice care, and some home health care. Since most people pay Medicare taxes for at least ten years during their working career, or have a spouse who did, they do not usually pay a premium for Part A. If one does not meet this requirement, then individuals pay a premium for these benefits.
Premiums for 2025
For the year 2025, the following changes have been made: the monthly premium paid by individuals who must buy Medicare Part A will be increased. The standard premium will increase to $518, which is $13 more than in the earlier year. It applies to those individuals who do not have sufficient work history to qualify for premium-free Part A.
Workers who paid Medicare taxes for between 30 quarters but less than ten years, pay a reduced premium of $285, $7 more than in 2024. Those who paid for less than 30 quarters of coverage pay the total premium of $518.
Changes in deductibles and coinsurance
In addition to the increases in premiums, for the year 2025, the Medicare Part A deductible is going to increase. The inpatient hospital deductible will increase by $44 and rise to $1,676 per benefit period. The deductible is an amount that beneficiaries pay before Medicare starts covering the costs of a hospital stay. The coinsurance rates for extended stays in hospitals are also going to be changed:
- From days 61 through 90 of hospitalization, beneficiaries will pay $419 per day, up from $408.
- For lifetime reserve days beyond 90 days the coinsurance will rise to $838 per day, up from $816.
- In the case of skilled nursing facilities, daily coinsurance for days 21 through 100 will increase to $209.50, up from $204.
Impact on beneficiaries
These increases in premiums and deductibles have the potential to trickle down to a wide array of seniors and people with disabilities who rely on Medicare services. According to changes made by the Centers for Medicare & Medicaid Services, these projected changes in prices, along with increased utilization of health care consistent with historical use, formed the basis of these changes.
While most beneficiaries won’t pay a premium for Part A, considering their work history, the ones that will do have to budget properly, as they will be facing higher costs in 2025. While the growing deductibles mean out-of-pocket costs may greatly increase for those needing hospital care, on the whole, it means an uptick in spending for those who require it.
Relation to Social Security
This is particularly relevant because most beneficiaries have their Medicare premiums deducted directly from their Social Security benefits. Thus, increases in Medicare costs directly decrease net Social Security payments. Social Security benefits increase by 2.5% in 2025 based on the COLA. That may be mainly eaten up by increased premiums and deductibles for Medicare.
The monthly Medicare Part B premium, for example, is set to increase from its standard amount by $185 per month, a hike that compounds the effect of an already-strained budget with rising deductibles and other healthcare costs.
Read more: Goodbye to Social Security hikes from COLA adjustment – This will be the increase in Medicare Part B premiums by 2025
Read more: Goodbye to Social Security hikes from COLA adjustment – This will be the increase in Medicare Part B premiums by 2025
