Medicare open enrollment for 2025 coverage runs until Dec. 7. This will be a critical time for many Americans as major changes are coming to this federal health insurance program in 2025.
Medicare premiums and deductibles will increase, but enrollees could also find major savings opportunities—especially when it comes to prescription drugs. And in the case of Medicare Advantage, some plans are ending coverage.
So now may be a good time to review your Medicare plans and compare other options to ensure you’re getting the best coverage to meet your individual needs. And if you’re new to Medicare, becoming an informed shopper is key right now.
Key Changes in Medicare for 2025
Savings on Prescription Drugs
Starting in 2025, people enrolled in Medicare Part D will have a $2,000 annual out-of-pocket maximum for covered prescription drugs. This cap includes deductibles, copayments, and coinsurance.
Part D plans in 2025 may have a deductible of up to $590. After meeting the deductible, you’ll owe copayments for medications until your total out-of-pocket costs reach $2,000.
However, Part D enrollees can choose to spread out prescription drug costs on a monthly basis rather than pay all at once.
But keep in mind that the new out-of-pocket maximum applies only to prescriptions covered by Part D. It won’t apply to Part B drugs. These are typically vaccines and injections administered by health care professionals.
These changes were made possible by the Inflation Reduction Act. Because the cap will be indexed to the growth in per capita Part D costs, the cap may rise in future years.
So if you’re enrolled in Part D or interested in enrolling, you can use the online Medicare Plan Finder tool to compare plans and see whether your prescriptions are covered.
Medicare Advantage Plans Ending Service
Starting in 2025, some Medicare Advantage plans are ending coverage. If you were affected, your provider should have alerted you via mail during October.
Nonetheless, you’d still be covered until Dec. 31.
Afterward, there are steps you can take. You can enroll in a new Medicare Advantage plan or switch to Original Medicare coverage.
But if your plan is terminated, you qualify for the special enrollment period (SEP) that runs from Dec. 8, 2024, through Feb. 28, 2025.
If you make changes from Dec. 8–31, your new coverage takes effect on Jan. 1, 2025.
However, you’ll be automatically enrolled in Original Medicare if you haven’t made a decision by Jan. 1. And if you make changes in January 2025, your new coverage will begin on Feb.1, 2025. Changes you make in February 2025 take effect on March 1, 2025.
Increased Medicare Costs
Medicare premiums and deductibles will go up in 2025.
High earners could also owe a monthly surcharge on Medicare Parts B and D premiums due to the income-related monthly adjustment amount (IRMAA).
So here’s a breakdown of Medicare costs:
- Part A: Deductibles will increase to $1,676 in 2025 ($44 increase from 2024 levels). This would cover the first 60 days of hospitalization in a benefit period. Coinsurance for those hospitalized for the 61st through 90th day will rise to $419 a day ($11+ from 2024)
- Medicare Part B: Deductibles will rise to $257 ($17+ from 2024). The standard premium in 2025 will increase to $185 ($10.30+ from 2024.) Part B IRMAA surcharge amounts would range from $74 to $443.90.
- Part D: Average Part D monthly premium will be $46.50 in 2025 (a $7.45 decrease from 2024). Part D surcharges will range from around $13.70 to $85.80. This surcharge could also apply if your Medicare Advantage plan contains Part D coverage.
Medicare Basics Overview
Medicare is a federal health insurance program generally designed for citizens aged 65 and over.
But it can be an extremely complex system with many moving parts. So, to freshen up, here are some key terms you should know:
- Medicare Part A: This covers inpatient hospitalization. After you’ve paid your deductible, Medicare Part A fully covers inpatient hospital services for the first 60 days of each benefit period. The benefit period starts when you’re admitted to a hospital or skilled nursing facility, and it ends when you haven’t received inpatient services for 60 consecutive days. This means you can have several hospital stays in a single benefit period so long as you haven’t been hospitalized for 60 straight days. You must pay your deductible for each new benefit period. Most people don’t pay premiums for Part A.
- Medicare Part B: This covers doctor’s visits and outpatient services. It could also cover preventive services such as vaccines and medical equipment such as walkers. You’d owe a deductible and premiums for Part B. Together with Part A, the unit is known as “Original Medicare.” You typically enroll in both at the same time.
- Medicare Part D: This covers prescription drugs. You would owe monthly premiums, a deductible, and coinsurance for Part D. These plans are run by private insurance companies overseen by Medicare. It is separate from Original Medicare.
- Medicare Advantage (Part C): This is a bundled plan that offers parts A, B, and D services. They are managed by private insurance companies approved by Medicare. Out-of-pocket costs can vary widely across plans, and some may offer services not common among Original Medicare.
- Medigap (Medicare Supplemental Insurance): This is extra insurance coverage you can buy from private companies to address costs not covered by Original Medicare or Medicare Advantage.
As you can see, the services and costs associated with Medicare can be a real headache. This is why it’s important to assess your needs and finances and carefully review your options. A good place to start is the Medicare Finder Tool.
The Epoch Times copyright © 2024. The views and opinions expressed are those of the authors. They are meant for general informational purposes only and should not be construed or interpreted as a recommendation or solicitation. The Epoch Times does not provide investment, tax, legal, financial planning, estate planning, or any other personal finance advice. The Epoch Times holds no liability for the accuracy or timeliness of the information provided.
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