Seniors Squeezed by Costs Outpacing Social Security and Inflation Medicare Part B Sticker Shock

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Medicare Part B Costs Set to Rise in 2024, Impacting Beneficiaries

Medicare Part B beneficiaries will face a higher annual deductible in 2024, rising from $240 to $257. This increase, attributed to projected cost and usage increases by the Centers for Medicare & Medicaid Services (CMS), adds to the growing financial burden for many seniors relying on Medicare coverage.

The Part B monthly premium, determined by income, will also see an increase. High-income beneficiaries will experience an even greater impact due to the Income-Related Monthly Adjustment Amount (IRMAA), a surcharge added to their standard premium. While the 2022 Inflation Reduction Act brought some welcome relief regarding prescription drug costs and vaccines for certain Medicare beneficiaries, the rising Part B premiums continue to be a concern.

The projected increase in the 2025 Medicare Part B premium is particularly noteworthy, outpacing both the rate of inflation and the Social Security cost-of-living adjustment (COLA). This disparity creates a financial squeeze for many seniors, especially those relying heavily on Social Security benefits to cover their healthcare expenses.

Mary Johnson, an independent Social Security and Medicare policy analyst and a beneficiary herself at 73, highlights the impact of this trend. While most Social Security recipients aged 65 and older will have benefits high enough to cover the anticipated $10.30 per month increase of Part B premiums from $174.70 to $185.00, the same is not true of individuals who pay higher premiums based on income, she explains. When Part B premiums grow at a faster rate than Social Security COLAs, premium costs consume a growing portion of monthly Social Security checks.”

Data reveals a long-term pattern of Part B premiums outpacing COLA increases. Johnson's analysis shows that from 2005 to 2024, Part B premiums increased by an average of 5.5% annually, while COLAs averaged just 2.6%. This widening gap contributes to the financial strain experienced by many seniors.

Historically, there have been periods of stability in Part B premiums. Johnson notes four years during which premiums remained unchanged: 2009, 2014, and 2015 under the Obama administration, and 2018 under the Trump administration. However, even with these periods of reprieve, significant double-digit premium spikes have occurred under recent presidential administrations, including those of George W. Bush, Barack Obama, Donald Trump, and now Joe Biden.

This persistent upward trend in Medicare Part B costs raises concerns about the long-term affordability of healthcare for seniors. As the gap between premium increases and COLA adjustments widens, beneficiaries face increasingly difficult choices in managing their healthcare expenses. The need for sustainable solutions to address this growing financial burden is becoming increasingly urgent.

This information is based on available data and projections and is subject to change.