Medicare's annual enrollment period ended on Dec. 7. Hopefully, you had a chance to review your options and choose the plan you believe will provide you the greatest coverage at the lowest cost in 2025.
How much you'll spend depends on a lot of individual factors, but there are some major Medicare cost changes that will affect a broad number of retirees next year. Planning for them now can minimize the shock when the bills start coming in.
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1. Part A deductible and coinsurance
Medicare Part A covers in-patient hospital stays, skilled nursing care, hospice, and some home healthcare services. Most people don't pay a premium for this coverage because either they or their spouse paid enough in Medicare taxes throughout their career. But there are still deductibles and copays. Here's the breakdown of how these costs will change in 2025:
|
Expense |
2024 Cost |
2025 Cost |
|---|---|---|
|
Part A deductible |
$1,632.00 |
$1,676.00 |
|
Daily hospital coinsurance (61st to 90th day) |
$408.00 |
$419.00 |
|
Daily hospital coinsurance for lifetime reserve days |
$816.00 |
$838.00 |
|
Skilled nursing facility daily coinsurance (21st to 100th days) |
$204.00 |
$209.50 |
Source: Centers for Medicare & Medicaid Services. Chart by author.
2. Part B deductible and premium
Medicare Part B covers outpatient care, durable medical equipment, and some prescription drugs. In 2024, the Part B deductible is $240 but will rise by $17 to $257 in 2025.
Most people pay the standard Part B premium, which is $174.70 in 2024. This is also climbing in 2025 to $185 per month, which is a $10.30 increase. This is especially important because Medicare premiums usually come out of your Social Security checks if you're already claiming benefits. This cost increase will eat up a good chunk of the average retiree's $49 monthly benefit increase next year.
High earners pay even more for Medicare Part B and will also see their premiums rise next year, according to their modified adjusted gross incomes (MAGI) as outlined in the following table:
|
MAGI for Individual Filers: |
MAGI for Married Couples Filing Joint Returns: |
2025 Medicare Part B Premium Amount |
|---|---|---|
|
Greater than $106,000 and less than or equal to $133,000 |
Greater than $212,000 and less than or equal to $266,000 |
$259.00 |
|
Greater than $133,000 and less than or equal to $167,000 |
Greater than $266,000 and less than or equal to $334,000 |
$370.00 |
|
Greater than $167,000 and less than or equal to $200,000 |
Greater than $334,000 and less than or equal to $400,000 |
$480.90 |
|
Greater than $200,000 and less than $500,000 |
Greater than $400,000 and less than $750,000 |
$591.90 |
|
Greater than or equal to $500,000 |
Greater than or equal to $750,000 |
$628.90 |
Source: Centers for Medicare & Medicaid Services. Chart by author. MAGI=Modified adjusted gross income.
3. Cap on out-of-pocket prescription drug costs
Beginning in 2025, Medicare will place a $2,000 limit on out-of-pocket prescription drug costs. This includes payments you make, as well as payments that others, including Medicare's Extra Help program, pays on your behalf.
Once you reach this limit, you won't have to pay your Medicare Part D coinsurance for the rest of the year, regardless of how much more you spend on prescription drugs. However, you'll still have to pay your Part D premium to keep the plan in force.
4. Reduced access to telehealth services
Medicare is scaling back access to telehealth services in 2025, which could negatively affect those who have relied heavily on this service over the last few years. Through Dec. 31, you can use telehealth services from anywhere in the U.S. -- and from your home.
However, beginning Jan. 1, telehealth services will be limited to rural areas, and patients will be required to travel to an approved medical facility to participate in the telehealth call. There are a few exceptions to this rule, though, for the following:
- Monthly End-Stage Renal Disease (ESRD) visits for home dialysis
- Services for diagnosis, evaluation, or treatment of symptoms of an acute stroke, wherever you are
- Services to treat a substance use disorder or co-occurring mental health disorder or for the diagnosis, evaluation, or treatment of a mental health disorder
- Behavioral health services
- Diabetes self-management training
- Medical nutrition therapy
If any of the above things apply to you, Medicare will still cover your telehealth visits, regardless of your location. However, you'll still be responsible for your Part B premium and 20% copay.
If you have any questions, it's best to contact the Center for Medicare & Medicaid Services or your healthcare plan administrator before 2025. You can also review your plan's policy for more specific details on what it will and will not cover next year.
