Medicare is big business, recently providing healthcare coverage to 68 million people. It changes a little or a lot every year, and millions have strong opinions about it, too:
- Before the 2024 election, fully 94% of surveyed seniors said it was very or extremely important to protect Medicare, per the Better Medicare Alliance.
- 65% of people say that Medicare has fully met their expectations, per the Commonwealth Fund 2024 Value of Medicare Survey.
- 51% say the federal government doesn't spend enough on Medicare (with 46% saying the same about Medicaid), per the KFF Health Tracking Poll.
- Close to two-thirds (63%) are worried that Medicare won't be around when they need it, per 2024's Nationwide Retirement Institute Health Care Costs in Retirement survey.
Image source: Getty Images.
Given the importance of Medicare, here are some changes for 2025 to know about right now.
1. Premiums and deductibles have risen
Premiums and deductibles tend to increase regularly, and 2025 is no exception. The Part A annual deductible for hospital stays rose from $1,632 to $1,676, and the Part B annual deductible for medical insurance (including services from healthcare providers, outpatient care, home healthcare, preventive services, and more) jumped from $240 to $257.
Fortunately, most retirees don't pay premiums for Part A -- but they do pay Part B premiums. The standard Part B monthly premium increased from $174.70 in 2024 to $185 for 2025. Note, though, that if you're a high earner, you might have to pay up to $628.90 per month for Part B coverage.
2. Prescription drug costs have been lowered
The Inflation Reduction Act's Medicare Prescription Drug Inflation Rebate Program has lowered prices for dozens of prescription drugs and annual out-of-pocket costs for prescription drugs are now capped at $2,000 for those on Medicare who have a Part D drug plan.
3. Say goodbye to the "donut hole" gap in coverage
Until recently, there was a dreaded "donut hole" gap in prescription-drug coverage. That was the period after you and your drug insurance plan spent a certain sum on prescriptions -- at which point you had to pay until another sum was spent -- when your insurance coverage then resumed.
Now there's a Medicare drug deductible of $590 for 2025. If you max that out, you'll likely pay just 25% of the cost of your drugs until you hit that $2,000 out-of-pocket cap. After that, Medicare pays.
4. Mental health coverage has expanded
Starting in 2025, more mental health providers will be permitted to serve Medicare enrollees. These include addiction counselors, licensed mental health counselors, and marriage and family therapists.
5. Telehealth services have been restricted
Telehealth services, such as when your visit with a healthcare provider is conducted electronically, perhaps via your iPad, will be less available in 2025. The new rule is that you must be in a rural medical facility or office to qualify for most telehealth services, with a few exceptions. These are the exceptions, for which you can have a telehealth visit without being in a rural location:
- Monthly end-stage renal disease visits for home dialysis
- Services for diagnosis, evaluation, or treatment of symptoms of an acute stroke
- Services to treat a substance use disorder or a 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
6. Caregivers get more help
In Medicare's own words, "Medicare covers additional caregiver support, like training that helps your caregiver better care for you ... and relief when they're caring for family members in hospice care. ... Also, some people living with dementia and their caregivers may be able to get more support though a new pilot program."
7. Coverage changes for postal workers
Beginning in 2025, eligible U.S. Postal Service workers, retirees, and their families will be covered through the Postal Service Health Benefits Program (PSHB) instead of the Federal Employee Health Benefits Program (FEHB) -- though the PSHB is housed within the FEHB. Those affected or interested can learn more here.
Heads up: All of the above might change further
Those are some of the main changes to know about for Medicare for 2025, but you should also know that some big changes might be coming soon, as the new administration in Washington seems keen to make them.
Already, President Trump has rescinded an executive order from President Biden that was to lower prescription drug costs and speed up the process by which treatments get approved. It's not clear yet exactly what will happen, so stay tuned.
