Millions of people get their health coverage through Medicare. As of December 2024, the program had 68 million enrollees, about 90% of whom were 65 or older.
This year, there are a number of ways Medicare is changing -- some for the better, and others less so. Here are three key changes that could have a big impact on your wallet in 2025.
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1. A hospital stay will cost you more
Although Medicare enrollees typically don't pay a premium for Part A, which covers hospital care, there's a cost for being admitted to the hospital. In 2025, you'll face a $1,676 inpatient deductible, up from $1,632 in 2024.
That $1,676 covers only your first 60 days of care, though. Beyond that, you're looking at a daily coinsurance rate of $419 in 2025, up from $408 last year, for days 61 through 90. The daily coinsurance rate for lifetime reserve days has also changed this year -- it's $838, up from $816 in 2024.
On a related note, the cost of skilled nursing care under Medicare Part A is also higher this year. For days 21 through 100 at a skilled nursing facility, your daily coinsurance cost is $209.50, up from $204 in 2024.
2. Part B comes with a higher monthly price tag and annual deductible
Unlike Part A, Medicare Part B costs enrollees money in the form of a monthly premium. In 2025, the standard monthly premium is $185, up from $174.70 in 2024. The annual Part B deductible has also increased modestly to $257, up from $240 last year.
Unfortunately, this Part B increase comes at a time when Social Security benefits have gotten only a modest 2.5% cost-of-living adjustment (COLA). A roughly $10 increase in the cost of Part B is going to leave many seniors with less of a raise at a time when inflation hasn't fully cooled.
It's also worth noting that $185 is the standard Part B premium this year. Higher earners subject to income-related monthly adjustment amounts will face higher costs for Part B.
3. There's a cap on Part D drug costs
Prescription copays can put a huge strain on older Americans' budgets. The good news there is that effective in 2025, Medicare enrollees won't have to pay more than $2,000 out of pocket for prescription drugs covered under Part D. This cap was established by the Inflation Reduction Act of 2022.
The Kaiser Family Foundation says that had a similar cap been in place in 2021, 1.5 million Medicare Part D enrollees would've saved money on their prescription costs. Among those 1.5 million people, 12% spent $5,000 or more out of pocket that year.
Healthcare tends to be a major expense for retirees, so it's important to stay informed about Medicare changes. In addition to the updates above, your specific Medicare Advantage or Part D plan may have changed in 2025, so pay attention to who's in network and what you're being charged to avoid problems in the course of taking care of your health.
