Now is the time of year to review — and prepare for — changes to your Medicare plan and costs.

Each year, Medicare numbers change slightly, with premiums and deductibles usually inching up a tiny bit to keep up with inflation. The good news is that these increases are not usually significant — and this continues to be true this year.

However, there are a few areas Medicare users should note.

What if my income has been reduced?

The government uses the Income Reconciliation Medicare Adjustment Act, or IRMA, which ties the premium that somebody pays for their Medicare Part B to their income. They look at income two years prior to the insurance year. So for insurance year 2025, they will use your 2023 tax returns as your annual income. 

See the chart below to note where your premiums will be in 2025. If your income has stayed the same or increased since 2023, there’s no need to do anything. 

However, if you’ve lost some of your annual income due to divorce, job loss, retirement or other causes, you need to alert the government. Otherwise, Medicare won’t note the changes until after you’ve filed your income taxes, and you’ll be stuck paying higher premiums for the rest of the year. 

Be sure to fill out the SSA 44 form and then hand deliver it to your local Social Security office. This form will explain why your income went down, allowing your Part B premium to be reduced.

Very few people file out this form. If your income has reduced significantly, this quick step could save you hundreds of dollars. 

What will my Medicare costs look like this year?

The good news is that as long as you worked for 40 quarters over the course of your lifetime and paid into the FICA tax, you should not have a premium for your Medicare Part A.

You do have a premium for your Medicare Part B as well as for Medicare Part D, which covers prescription drugs. There could also be a higher charge for Part D, depending on your income. You can reference the chart again to see what your premium will be for the upcoming year.

Most Medicare recipients won’t notice the cost increases for two reasons. First, most people have their Medicare premium costs taken right out of their Social Security check. If that’s the case for you, that means one less bill you need to keep track of.

Second, this year every Social Security recipient will receive a 2.5% increase in their monthly income. This cost of living increase should virtually negate any increase in Medicare premium costs. 

Contact me with any questions

As always, I welcome my clients to set up an appointment so we can go over their Medicare options for next year and clarify any questions you may have about the changes: 954-775-0275. 
If you or a loved one turns 65 in 2025, please give me a call. It takes only 30 minutes for me to give you all the information you need to know about Medicare, and the choice you make will affect your health and quality of life for the rest of your years.