Medicare beneficiaries can expect some changes to their health care costs and coverage in 2025, including higher premiums and deductibles, offset by better coverage.
The standard monthly premium for Medicare Part B, which covers outpatient care, will increase from $174.70 to $185 in 2025, according to the Centers for Medicare and Medicaid Services (CMS). The agency announced earlier this month the annual deductible for all Part B beneficiaries will also rise from $240 last year to $257 in 2025.
Those enrolled in Part A will face higher costs for hospital care, including increased inpatient deductibles and coinsurance rates, with the deductibles increasing by $44 to $1,676 in 2025 which covers 60 days. Beyond that, coinsurance for days 61 through 90 will cost beneficiaries $419 per day, an increase of $11 compared to last year.
For prescription drug coverage under Medicare Part D, beneficiaries should expect lower overall premiums for both Medicare Advantage (MA) and Medicare Part D, the agency announced in September.
Higher-income earners may be subject to an additional fee known as an Income-Related Monthly Adjustment Amount (IRMAA) for their Part D coverage. This surcharge is based on income from two years prior with income brackets available on the agency’s website.
The average monthly premium for all MA plans is expected to drop from $18.23 in 2024 to $17.00 in 2025. Similarly, the average total Part D premium is anticipated to decrease by $7.45, from $53.95 in 2024 to $46.50 in 2025.
CMS Administrator Chiquita Brooks-LaSure stated in the November announcement the Medicare program is “meeting the needs of people with Medicare more than ever before,” and advised recipients to review their health care coverages during open enrollment.
One major change expected in 2025 is the implementation of a $2,000 annual cap on out-of-pocket prescription drug costs, a result of the Inflation Reduction Act, according to CMS. The new limit aims to provide financial relief for those with high medication expenses, they said.
According to Medicare.gov, the official website for Medicare, a new prescription drug law, effective since Jan. 1, 2023, has introduced several cost-saving measures for beneficiaries. These include:
- Expanded vaccine coverage: Part D plans now offer more vaccines at no out-of-pocket cost.
- Reduced insulin costs: Both Part D and Part B insulin costs are capped at $35 for a one-month supply.
- Lower coinsurance for certain Part B drugs: Beneficiaries may pay 20 percent less for drugs whose prices have increased faster than the inflation rate.
- Expanded Extra Help program: More individuals who face financial hardships or have limited resources can qualify for assistance with drug costs starting in 2024.
The website also highlighted how Medicare has begun negotiating directly with manufacturers for the prices of certain high-cost brand-name drugs. They said the first ten drugs selected for negotiation include popular medications such as Eliquis, Jardiance, and Xarelto, with negotiated prices taking effect in 2026.
Medicare.gov, the Medicare Plan Finder, and the 1-800-MEDICARE helpline are available to help beneficiaries compare plans and choose their health care coverage for 2025.