When Walt Disney said, “Times and conditions change so rapidly that we must keep our aim constantly focused on the future,” his words referenced how inevitable change is, how quickly it can occur, and how we must continuously look to the future. The meaning behind this quote and the ever-changing world in which we live could apply to so many things, including Medicare, Medicaid, and Social Security.
Every year, the Farr Law Firm releases the newest figures for Medicaid LTC (long-term care), also called LTSS (long-term supports and services), Medicare, and Social Security, and an analysis of important developments, statuses, and updates involving these programs. Below are figures for 2025 that are frequently used in the Elder Law practice, including the figures for spousal impoverishment, penalty divisors, and more, for Virginia, Maryland, and DC. Medicare premiums and co-pays, Social Security Disability, and Supplemental Security Income are also covered.
Medicaid Figures:
Medicaid provides comprehensive health care coverage and long-term services and supports (LTSS) to over one in five people living in the US. Medicaid also represents nearly one in five dollars spent on health care in the U.S. and half of LTSS spending. Medicaid is administered by states within broad federal rules and jointly funded by states and the federal government through a federal matching program with no cap. This article, and all articles on the Farr Law Firm blog and website, when discussing Medicaid, are discussing Medicaid LTSS, NOT Medicaid health care coverage.
Please note: While some of the spousal impoverishment standards, such as the maximum community spouse income maintenance allowance and community spouse minimum and maximum resource allowances, are adjusted each January, other numbers, including the community spouse’s minimum and maxium monthly maintenance needs allowance (MMNA) are adjusted, in accordance with changes to the federal poverty level, effective July 1 of each year. Additionally, the community spouse’s monthly housing allowance, which is calculated based on a percentage of the MMNA, is also adjusted each July 1.
Virginia/Maryland/DC Medicaid Numbers
Divestment Penalty Divisors (To be Adjusted on July 1, 2025)
Northern Virginia Penalty Divisor: $9,268/month – Northern Virginia (Alexandria, Arlington, Fairfax, Falls Church, Loudoun, Manassas, Prince William)
Rest of Virginia Penalty Divisor: $7,023/month
DC Penalty Divisor: $14,563.96/month
Maryland Penalty Divisor: $11,513/month
Individual Resource Allowance
Virginia Individual Resource Allowance: $2,000
Maryland Individual Resource Allowance: $2,500
DC Individual Resource Allowance: $4,000
Married Couple Resource Allowance
Virginia Married Couple Resource Allowance: $4,000
Maryland Married Couple Resource Allowance: 3,000 per spouse; after 6 months, $2,500 per spouse.
DC Married Couple Resource Allowance: $6,000
Monthly Personal Maintenance Allowance
Virginia Monthly Personal Maintenance Allowance:
$40 (Community-Based Care PMA is 165% of SSI Level (rounded up to the nearest dollar, so $1,509 for 2024 based on SSI Level of $914 (See M1470.410)
Maryland Monthly Personal Maintenance Allowance: $102
DC Monthly Personal Maintenance Allowance: $103.20
Shelter Standard
Virginia Shelter Standard: $766.50
Maryland Shelter Standard: $766.50
DC Shelter Standard: $766.50
Standard Utility Allowance
Virginia Standard Utility Allowance: $551
Maryland Standard Utility Allowance: $551
DC Standard Utility Allowance: $374
Medicaid Home Equity Caps
Virginia Medicaid Home Equity Cap: $713,000
Maryland Medicaid Home Equity Cap: $713,000
DC Medicaid Home Equity Cap: $1,097,000.000
Community Spouse Resource Allowance
Minimum Community Spouse Resource Allowance (except in Alaska and Hawaii): $ 29,724
Maximum Community Spouse Resource Allowance (except in Alaska and Hawaii): $148,620
Community Spouse Monthly Maintenance Needs Allowance
Minimum Monthly Maintenance Needs Allowance (except in Alaska and Hawaii): $2,555
Maximum Monthly Maintenance Needs Allowance (except in Alaska and Hawaii): $3,948
For CMS’s complete chart of 2025 SSI and Spousal Impoverishment Standards, click here.
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Veterans Aid and Attendance Figures:
Single Veteran: $2,358 per month
Veteran with One Dependent: $2,796 per month
Spouse of a Living Veteran: $1,851 per month
Husband & Wife Both Veterans: $3,473 per month
Surviving Spouse of Veteran: $1,516 per month
Click here for all Veterans Aid and Attendance Figures and Rules.
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Gift Tax Annual Exemption in 2025: $19,000 (up from $18,000 in 2024)
Gift Tax Lifetime Exemption in 2025: $13.99 million (up from 13.61 million in 2024); please note this is currently slated to be cut to approximately 6 million in 2026.
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Medicare
Medicare is the federal government program that provides health insurance if you are 65-plus, under 65 and receiving Social Security Disability Income (SSDI) for a certain amount of time, or under 65 and with End-Stage Renal Disease (ESRD). Medicare has been protecting the health and well-being of American families and saving lives for five decades.
The Inflation Reduction Act of 2022 is responsible for some of the biggest Medicare changes in the past several years. For example, in 2024, the government expanded eligibility for financial assistance from the Part D Extra Help program and announced the results of negotiations to reduce the costs of 10 of Medicare’s most expensive drugs on Aug. 15. Those prices will take effect in 2026.
These are the most notable changes for 2025:
- $2,000 out-of-pocket spending cap for prescriptions: One of the biggest changes takes effect in 2025, when Part D plans must cap out-of-pocket spending on covered drugs at $2,000 a year. That change will affect Part D and Medicare Advantage plans’ other costs and coverage.
- The $2,000-a-year out-of-pocket limit for prescription medications applies to stand-alone Medicare Part D policies and drug coverage in Medicare Advantage plans.
- The $2,000 cap includes deductibles, copayments, and coinsurance for covered drugs. It doesn’t apply to premiums or to drugs a plan doesn’t cover.
- No more Part D ‘donut hole’ or coverage gap: This change simplifies the way Part D works. Before 2025, plans had four coverage phases.
- You pay the full cost of drugs until you meet your deductible, up to $545 in 2024.
- Initial coverage with copayments that vary by medication.
- Coverage gap, which occurs when you and your drug plan reach $5,030 spent on covered medications in 2024. It was known as the “donut hole” because Medicare and Supplement plans used to pay nothing during this time. Now plans pay less in this gap, especially for brand-name drugs, and may have dispensing fees. You may pay more out of pocket for the same meds than in your initial coverage period, but not as much as in prior years.
- Catastrophic coverage begins at $8,000, based on your out-of-pocket costs, not the insurer’s share, and manufacturers’ discounts in the coverage gap. In the catastrophic phase in 2024, you pay nothing for your covered prescriptions until the new year, Jan. 1, 2025.
In 2025, Part D plans can have a deductible of up to $590. Then you pay copayments for your medications until your total out-of-pocket costs reach $2,000. The cap is expected to help millions of people. By April 1, 2024, more than 1.7 million people, about 3.5 percent of people covered by drug plans, had already reached $2,000 in out-of-pocket costs on their prescriptions, according to the Centers for Medicare & Medicaid Services (CMS). More certainly will surpass that by the end of the year.
People with high drug costs tend to pay a lot at the beginning of a year. The Medicare Prescription Payment Plan will let enrollees opt to pay their prescription costs monthly rather than all at once. This will enable people to spread out the out-of-pocket drug costs over the course of the year so you don’t experience that sticker shock and those cash flow issues at the pharmacy. The payment plan doesn’t reduce the total cost, but it can help with budgeting. You can opt into the plan by contacting your Part D company.
- Part B premiums for 2025: The premium for Part B of Medicare, which covers doctors’ services and care outside a hospital, is increasing nearly 6 percent, to $185 for most beneficiaries, compared to 2024, according to a Nov. 8 announcement from the Centers for Medicare and Medicaid Services (CMS). Those with higher incomes pay more.
- You may see a big variation in premiums, copayments, and covered drugs during open enrollment this year. Look at the annual notice of change that your plan must send in September outlining changes to your plan for 2025.
- More ways to get weight loss drugs: Medicare is prohibited from covering drugs prescribed specifically for weight loss. But Part D plans can cover popular weight loss drugs when they’re ordered for other purposes, such as Ozempic and Mounjaro for type 2 diabetes.
- You may also find more weight loss drugs covered in 2025.
- Part D enrollees who take these drugs will benefit from having the new $2,000 cap on their drug expenses. Part D plans can expand coverage as the FDA approves other uses for weight loss drugs.
- Subtle changes to your Medicare Advantage coverage: Medicare Advantage plans may make changes in 2025 to help cover their additional expenses. Be wary, however. Although a zero-dollar premium may seem really attractive, beware of the adage “you get what you pay for” — a zero-dollar premium plan may, for example, have a very limited list of covered drugs; increase your out-of-pocket maximum spending limit; increase the percentage you pay for some services, called coinsurance; or reduce some of the extra benefits that drew you to the plan in the first place. For example, if you still have a dental benefit, maybe it’s a little less generous than in prior years.
- Review your plan’s annual notice of change carefully. Don’t just rely on the general description of coverage in the Medicare Plan Finder when comparing Medicare Advantage plans.
- Look at the details in the Explanation of Benefits on the plan’s website before making a final decision. Also, reconfirm every year that your providers are in the plan’s network.
- Midyear statement from your Medicare Advantage plan: This is important for Medicare beneficiaries who have chosen Medicare Advantage plans instead of Original Medicare. The midyear statement will show available benefits that you haven’t used — important since those extras are often what persuades a Medicare enrollee to sign up with a particular plan. For example, if you haven’t used any of their dental, vision, hearing, or fitness benefits, plans are required to notify you if you have any benefits left.
- You’ll continue to see more realistic TV ads from Medicare Advantage plans. Rules that took effect last year before open enrollment prohibited Medicare Advantage ads from mentioning benefits not available in the area where the ad appears. The ads also can’t mislead you into thinking you’re contacting a government employee when you call with questions.
- Expanded program for family caregiver services: A program for dementia patients and their caregivers that launched this year will quadruple in 2025, serving more of the country. The program, called Guiding an Improved Dementia Experience (GUIDE), provides a 24/7 support line, a care navigator to find medical services and community-based assistance, caregiver training, and up to $2,500 a year for at-home, overnight, or adult day care respite services. Patients and their caregivers typically won’t have copayments.
- CMS selected 96 organizations to participate starting July 1, 2024, including academic medical centers, hospitals, small and large group practices, and community-based organizations already providing programs for dementia patients. The agency expanded to choose 294 organizations to join next July.
- Note that participants must be enrolled in original Medicare and have a dementia diagnosis. They can’t be in hospice or a nursing home.
- To learn more about the GUIDE program, see the CMS GUIDE program fact sheet here. To see a list of participants, click here.
- There will be a push to add more mental health providers to Medicare:
- Before this year, licensed marriage and family therapists, mental health counselors, and addiction counselors couldn’t bill Medicare because they weren’t allowed to enroll as Medicare providers. Now they can, and some have.
- More than 400,000 behavioral health clinicians nationwide are eligible, but you’ll need to ask any provider you seek if they accept Medicare.
- Medicare Advantage plans must meet stricter standards to improve access to behavioral health specialists.
- Expansion of Telemedicine for Behavioral Health Services: Although many telehealth expansions that took effect during the COVID-19 pandemic will expire at the end of 2024, Medicare permanently expanded access to telemedicine for behavioral health services. This can help with access to providers, especially in rural areas.
Below are the Medicare amounts and how they have changed for the coming year:
Medicare Part A
Medicare Part A covers inpatient hospitals, skilled nursing facilities, hospice, inpatient rehabilitation, and some home health care services. About 99 percent of Medicare beneficiaries do not have a Part A premium since they have at least 40 quarters of Medicare-covered employment.
The Medicare Part A inpatient hospital deductible that beneficiaries pay if admitted to the hospital will be $1,676 in 2025, an increase of $44 from $1,632 in 2024. (Note that certain Medigap plans do cover your Part A deductible.) You’ll pay the Part A deductible for each inpatient hospital or skilled nursing facility (SNF) benefit period — a new benefit period starts if you haven’t received inpatient hospital care or SNF care for 60 days in a row.
2025 Part A premium
No premium – for most beneficiaries who paid into Medicare through payroll taxes.
$285/month in 2025 – for those who worked/paid into Medicare between 7.5 and 10 years ($278 in 2024)
$518/month in 2025 – for those with a work history of less than 7.5 years ($1 less than $505.month in 2024)
2024 Part A deductible
2025: $1,676
2024: $1,632
(Covers up to 60 days in the hospital)
Daily coinsurance for 61st-90th Day
2025: $419
2024: $408
Daily coinsurance for lifetime reserve days
2025: $838
2024: $816
Skilled Nursing Facility coinsurance
2025: $209.50
2024: $204
Deductible is per benefit period, NOT per year. Once a beneficiary has been out of the hospital for at least 60 days, a new benefit period would start if and when they needed to be hospitalized again. Supplemental coverage, including Medigap plans, will pay some or all of the Part A deductible on your behalf.
Medicare Part B Premiums/Deductibles (2025 Summary)
Medicare Part B covers physician services, outpatient hospital services, certain home health services, durable medical equipment, and certain other medical and health services not covered by Medicare Part A.
Each year, the Medicare Part B premium, deductible, and coinsurance rates are determined according to provisions of the Social Security Act. The standard monthly premium for Medicare Part B enrollees will be $185.00 for 2025, an increase of $10.30 from $174.70 in 2024. The annual deductible for all Medicare Part B beneficiaries will be $257 in 2025, an increase of $17 from the annual deductible of $240 in 2024.
The increase in the 2025 Part B standard premium and deductible is mainly due to projected price changes and assumed utilization increases that are consistent with historical experience.
Beginning in 2023, individuals whose full Medicare coverage ended 36 months after a kidney transplant, and who do not have certain other types of insurance coverage, can elect to continue Part B coverage of immunosuppressive drugs by paying a premium. For 2025, the standard immunosuppressive drug premium is $110.40.
2025 Medicare Part B Income-Related Monthly Adjustment Amounts
Since 2007, a beneficiary’s Part B monthly premium has been based on his or her income. These income-related monthly adjustment amounts affect roughly 8% of people with Medicare Part B. The 2025 Part B total premiums for high-income beneficiaries with full Part B coverage are shown in the following table:
2025 Medicare Part D Premium by Income
Since 2011, a beneficiary’s Part D monthly premium has been based on his or her income. Approximately 8% of people with Medicare Part D pay these income-related monthly adjustment amounts. These individuals will pay the income-related monthly adjustment amount in addition to their Part D premium. Part D premiums vary by plan and, regardless of how a beneficiary pays their Part D premium, the Part D income-related monthly adjustment amounts are deducted from Social Security benefit checks or paid directly to Medicare. Roughly two-thirds of beneficiaries pay premiums directly to the plan while the remainder have their premiums deducted from their Social Security benefit checks.
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Social Security and Supplemental Security Income
2025 Social Security Changes
More than 72 million people depend on Social Security’s benefit programs, so annual changes to the program and its payouts are always highly anticipated. Substantially higher benefit checks have been a rarity in recent years. In 2025, Social Security recipients will see a 2.5 percent increase in their benefits and Supplemental Security Income (SSI) payments.
Federal benefit rates increase when the cost-of-living rises, as measured by the Department of Labor’s Consumer Price Index (CPI-W). The CPI-W rises when inflation increases, leading to a higher cost of living. This change means prices for goods and services, on average, are higher. The cost-of-living adjustment (COLA) helps to offset these costs. As we are still struggling with inflation, the extra money will help seniors and others make ends meet!
January 2025 marks when other changes will happen based on the increase in the national average wage index. Here are some other changes for 2025:
- There is a 2.5 percent COLA increase, but Medicare Part B is also increasing: While it’s true that in 2025, Social Security benefits are getting a 2.5% raise, the cost of Medicare Part B is also increasing in the new year, and the standard monthly premium will be about $10 higher. So, seniors who are enrolled in Medicare while on Social Security will be left with a smaller increase to their monthly checks, since Part B premiums are paid out of Social Security automatically.
- Earnings-test limits are going up:You’re allowed to earn money from a job while you’re getting Social Security. And once you reach full retirement age, there’s no need to worry about how much you’re earning — your paychecks from a job won’t have an impact on the amount of money you get from Social Security at the time you’re working. But if you haven’t reached full retirement age, you should be mindful of Social Security’s earnings-test limits. These limits dictate how much money you can get paid from a job before some of your benefits are withheld.
- The good news is that the earnings-test limits are going up in 2025 from $22,320 to $23,400. From there, $1 in Social Security benefits will be withheld per $2 of earnings.
- If you’re reaching full retirement age during 2025, you’ll be subject to an earnings-test limit until your birthday arrives. But in that case, you’ll have a higher limit — $62,160, up from $59,520 in 2024. And from there, $1 in Social Security benefits will be withheld per $3 of earnings.
- The wage cap is rising: Each year, there’s a wage cap established that determines how much income is taxed for Social Security purposes. In 2025, the wage cap is rising from $168,600 to $176,100. That means higher earners will pay Social Security tax on an extra $7,500. So, if that’s a category you fall into, gear up for that tax hit — and try to find ways to offset it, such as maxing out contributions to an IRA or 401(k) plan to shield more of your income from taxes.
- The value of a work credit is rising: Social Security benefits are earned by paying taxes on income throughout your career. To get benefits as a senior, you need 40 lifetime work credits, and you can accumulate four credits max per year.
- In 2025, the value of a work credit is rising from $1,730 to $1,810. This means that if you work very part-time but need your four credits to get Social Security, you may need to increase your hours or try fighting for better wages.
These are the Social Security Amounts for 2025:
Retirement Earnings Test Exempt Amounts
Under full retirement age*
2025: $22,320/yr. ($1,860/mo.)
2024: $23,400/yr. ($1,950/mo.)
*One dollar in benefits will be withheld for every $2 in earnings above the limit.
The year an individual reaches full retirement age**
2025: $62,160/yr. ($5,180/mo.)
2024: $59,520/yr. ($4,960/month)
Social Security Disability Thresholds
Non-Blind:
2025: $1,620/month
2024: $1,550/month
Blind:
2025: $2,700/month
2024: $2,590/month
Maximum Social Security Benefit: Worker Retiring at Full Retirement Age
2025: $4,018/month
2024: $3,822/month
SSI Federal Payment Standard
Individual:
2025: $967/month
2024: $943/month
Couple:
2025: $1,450/month
2024: $1,415/month
Estimated Average Monthly Social Security Benefits Payable in January 2025
All Retired Workers:
2025: $1,976/month
2024: $1,927/month
Aged Couple, Both Receiving Benefits:
2025: $3,089/month
2024: $3,014/month
Widowed Mother and Two Children:
2025: $3,761/month
2024: $3,669/month
Aged Widow(er) Alone:
2025: $1,832/month
2024: $1,788/month
Disabled Worker, Spouse, and One or More Children:
2025: $3,761/month
2024: $3,669/month
All Disabled Workers:
2025: $1,580/month
2024: $1,542/month
A new year brings new changes to Social Security, and now is the time to start thinking about how they’ll affect your benefits. For more details about 2025 Social Security Changes, please see the 2025 Social Security COLA Fact Sheet here.
It’s the Right Time to Start Planning!
Thank you for your interest in these key dollar amounts for 2025. We hope this was helpful! As always, if you or a loved one is nearing the need for long-term care or already receiving long-term care, or if you have not done Long-Term Care Planning, Estate Planning, or Incapacity Planning (or had your Planning documents reviewed in the past several years), please call us to make an appointment for an initial consultation:
Elder Law Attorney Fairfax: 703-691-1888
Elder Care Attorney Fredericksburg: 540-479-1435
Estate Planning Attorney Annapolis: 410-372-4444
Medicaid Asset Protection Attorney Rockville: 301-519-8041
Long-Term Care Planning Attorney DC: 202-587-2790
About Evan H Farr, CELA, CAP
