Not everyone pays the same amount for their Medicare premiums, and this often surprises many people. While the majority of Medicare beneficiaries pay a standard premium, your income could mean you’ll face higher costs. According to a study conducted by CMS, about 8% of beneficiaries pay more for their Part B and Part D premiums due to income adjustments.
Let’s explore how Medicare premiums work in 2025 and how your income can affect what you pay.
Medicare Costs in 2025
In late summer of 2024, CMS announced the updated Medicare premiums for 2025. Like in previous years, the adjustments in premium rates continue to reflect the evolving landscape of healthcare costs. Many beneficiaries may notice changes to their premiums, but the key factor remains consistent: your income plays a significant role in what you pay.
Medicare Part A Premiums
For most individuals, Medicare Part A is premium-free. As long as you or your spouse have worked and paid Social Security taxes for at least 40 quarters (10 years), you won’t have to pay anything for Part A. If you haven’t met this requirement, your Part A premium is determined by the number of quarters you contributed:
- At least 30 quarters: $285/month
- Fewer than 30 quarters: $518/month
It’s important to note that Part A premiums are not impacted by income. However, if you haven’t met the work requirements, there are programs that may help cover these costs, which we’ll discuss later.
Medicare Part B Premiums
The standard premium for Medicare Part B in 2025 is $185/month. However, individuals with higher incomes are subject to an additional cost called IRMAA, the Income-Related Monthly Adjustment Amount. IRMAA is calculated based on your modified adjusted gross income (MAGI) from two years prior. For 2025, your IRMAA is determined using your 2023 income.
IRMAA varies by income level, and like Medicare premiums, it often changes yearly. Here’s a look at how IRMAA impacts Part B premiums in 2025:
Medicare Part D Premiums
If IRMAA applies to your Part B premium, you’ll also be required to pay IRMAA for your Medicare Part D coverage. Unlike Part B, Part D premiums depend on the specific prescription drug plan you choose. The IRMAA for Part D is added to your plan’s base premium. However, IRMAA isn’t paid to your plan’s carrier. Instead, it goes directly to CMS. Here’s a breakdown of the additional Part D costs in 2025:
How to Reduce Your Medicare Premiums
If you’re paying IRMAA or finding that even the standard premiums are stretching your budget, there are ways to potentially reduce your Medicare costs. While not everyone qualifies for a reduction, it’s always worth exploring your options.
File an IRMAA Appeal
If you’ve experienced a significant, life-changing event, you can appeal your IRMAA determination. Qualifying events may include:
- Divorce
- Marriage
- Loss of a job
- Loss of a spouse
- Loss of a pension
- Loss of property income
To initiate an appeal, you’ll need to complete Form SSA-44 and provide supporting documentation, such as your most recent tax return. This process can help ensure your premiums better reflect your current financial situation.
Apply for the Medicare Savings Program
The Medicare Savings Program (MSP) offers financial assistance to beneficiaries who meet specific income and asset requirements. There are four different MSPs, and while each program has its own eligibility criteria, most can help pay your Medicare Part B premium. This could significantly reduce your out-of-pocket costs.
Apply for Extra Help
Extra Help is another program designed for individuals with limited incomes. It specifically assists with Part D costs by helping to pay your Part D premium and reducing copays for prescription medications.
Get Help From Carolina Senior Benefits
Do you have questions about your Medicare premiums or bills? At Carolina Senior Benefits, we’re here to help. We can review your situation to determine if you’re subject to IRMAA in 2025 and provide guidance on options to reduce your expenses. Don’t navigate this alone—reach out to us today!
