How the Social Security Fairness Act Could Change How Retirees Pay 2025 Medicare Premiums
Written by
Daria Uhlig
Edited by
Amber Barkley
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Until recently, many civil servants, railroad employees and federal employees were subject to rules that reduced their Social Security benefits or eliminated them entirely due to their employers providing alternative pensions.
The Social Security Fairness Act, which former President Joe Biden signed into law in January, restored these workers’ Social Security benefits retroactively to January 2024.
The change is welcome news for the 2.8 million individuals receiving Social Security for the first time or seeing their benefits increase due to the Act. But if you’re one of those beneficiaries, the new law could also change how you pay your Medicare premiums and how much premium you pay.
How You Pay Your Medicare Premiums Might Change
Before the Social Security Fairness Act, retirees had to send in Medicare premium payments directly, whereas Social Security beneficiaries have the premiums automatically taken out of their benefit payments.
Now that you’re covered by Social Security, your Medicare premiums will eventually be deducted from your payments.
Don’t Make Changes Until Instructed
If you currently pay your Medicare premiums directly to the Centers for Medicare & Medicaid Services, the Social Security Administration (SSA) recommends that you continue to do so, per the instructions on your bills, until you receive notice from the SSA that your Social Security record has been updated.
After that, your premiums will be deducted automatically from your benefit payments.
If you prepaid premiums to the Centers for Medicare & Medicaid Services, you might be due a refund once the automated payments go into effect. If so, the SSA will refund the money to you.
Changing Your Online Medicare Payments
The process works differently for those who pay Medicare premiums through Medicare Easy Pay or via online bill payments. Here’s what to do when the SSA notifies you that automated payments are scheduled to begin:
- If you use Medicare Easy Pay, complete the Authorization Agreement for Preauthorized Payments form (SF-5510) to stop the payments.
- If you pay via online bill payment, log in to your bank’s online banking or contact the bank to stop the payments.
Your Medicare Premiums Might Increase
The changes in Social Security benefits could also affect the premiums you pay for Medicare Part B and Part D by triggering an Income-Related Monthly Adjustment Amount (IRMAA). The premium is based on your modified adjusted gross income, which could increase if you get more benefits due to the Social Security Fairness Act.
Most beneficiaries pay the standard premium, which is $185 in 2025 and covers 25% of the cost of Parts B and D. The government subsidizes the rest. But higher-income individuals pay a larger share — 35% to 85% of the total cost, depending on modified adjusted gross income (MAGI).
In 2025, you’re considered a high-income beneficiary if your MAGI is more than $106,000, or more than $212,000 for married joint filers. However, Medicare uses the MAGI from your IRS tax return two years prior in its premium calculations, so be aware that you might not see the premium increase until 2026, based on your 2024 tax return.
If you experience a life-changing event, such as a marriage, divorce, death of a spouse or income loss, or you’ve filed an amended tax return showing less income, you might be able to reduce your IRMAA. Contact Medicare at 800-772-1213 and tell the representative that you want to lower your IRMAA.
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Sources
- CMS.gov, “SF5510: Authorization Agreement for Preauthorized Payments.”
- Social Security Administration, “Premiums: Rules for Higher-Income Beneficiaries.”
