Upcoming changes to Social Security rules in 2025 will benefit millions of pensioners, particularly those with public sector pensions. The legislation eliminates the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO), which reduce Social Security benefits for individuals with both Social Security and public pension income. Additionally, Medicare enrollees will have a new $2,000 annual out-of-pocket cap for Part D prescription drug costs.
While all Social Security beneficiaries will get a boost to benefits in 2025, certain pensioners are also expected to see a notable change to benefit rules.Here are big changes coming this year that beneficiaries should be aware of, experts say.And Medicare enrollees who are worried about health-care costs now have a $2,000 annual out-of-pocket Part D prescription drug cap aimed at helping to reduce those financial pressures.
Together, the rules affect around 2.5 million beneficiaries, according to the Congressional Research Service. Once enacted, the law may provide higher benefit payments to those individuals. The change will be effective with January checks for more than 72.5 million Americans, including Supplemental Security Income beneficiaries.
Part B deductibles will also rise, to $257, in 2025 — a $17 increase from the $240 annual deductible for 2024. Once beneficiaries pay their full deductible, they will owe 25% of the cost of coinsurance until their out-of-pocket spending on both generic and brand-name drugs reaches $2,000. After that, those beneficiaries will have what's known as catastrophic coverage, which means they won't be on the hook to pay out-of-pocket Part D costs for the rest of 2025.
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