Every fall, CMS (Centers for Medicare & Medicaid) mails out its Medicare and You Handbook, which details the changes for the upcoming year. These changes may impact both Medicare Advantage beneficiaries and those with Original Medicare. Here’s what you need to know about what changed for 2025.
Premiums and Deductibles
Medicare Part A
- Premium: Your Part A premium is determined by your work history. If you or your spouse worked for 10 years (40 quarters) or more, your Part A is free. If you worked 30 to 39 quarters, you will pay the reduced premium of $285 per month – an increase from $278 in 2024. If you worked less than 30 quarters, you will pay the full monthly premium of $518 per month, an increase from $505 in 2024. If you don’t enroll in Part A when you are first eligible, you may need to pay a late enrollment penalty.
- Annual Deductible: The Part A deductible for each inpatient hospital admission is $1,676, an increase from $1,632 in 2024. This covers your share of costs for the first 60 days of a Medicare-covered inpatient stay, also known as a benefit period. There is no limit to the number of benefit periods you are allowed to have, which means you may pay this deductible more than once during the year.
- Coinsurance: This varies with location and length of your hospital stay.
- Days 1 to 60: $0 after you pay your Part A deductible
- Days 61 to 90: $419 per day, an increase from $408 in 2024
- Days 91 to 150*: $838 per day, an increase from $816 in 2024
*Known as “lifetime reserve days” because Medicare will only pay for these extra days once in your lifetime
Part A deductibles and co-insurances do not apply if you have a Medicare Advantage plan. If you have a Medicare Supplement plan, some of these costs may be eliminated or reduced.
Medicare Part B
No matter whether you have Original Medicare or a Medicare Advantage plan, you will pay a Part B Premium. In 2025, the standard Part B monthly premium is $185, an increase from $174.70 in 2024. Individuals with higher incomes may pay more. You may also pay more if you did not enroll on time and have to pay a late penalty.
If you are enrolled in Original Medicare you will also have a Part B deductible of $257 in 2025. You are also responsible for a 20% coinsurance on Part B services. If you have a Medicare Supplement plan it could cover some of these out of pocket expenses.
Medicare Advantage
If you have a Medicare Advantage plan, your insurance carrier determines your premium and other out-of-pocket costs (deductibles, copays, coinsurances, and out-of-pocket maximum), within the limits set by CMS. Every fall, your insurer will send you an Annual Notice of Change letter, which spells out any changes to your plan for the coming year.
Part D Prescription Drug Coverage
Premium: Premiums vary by plan and insurance carrier. If you have a Medicare Advantage plan, your Part D coverage is included in your monthly premium. If you have a stand-alone prescription drug plan, you will pay a separate premium. Individuals with higher incomes may pay the Part D income-related monthly adjustment in addition to their monthly premium. You may also pay a late penalty if you did not enroll on time.
Deductible: Deductible amounts also vary by plan, but CMS sets a maximum amount allowed. This is $590 in 2025, an increase from $545 in 2024.
No Cost for Part D-Covered Drugs in the Catastrophic Coverage Phase
Out-of-pocket spending on Part D drugs is capped at $2,000 in 2025. This includes any deductibles, copays, and coinsurance spent on Part D drugs. Once you reach this amount, you will pay nothing for covered medications for the rest of the year.
The Medicare Prescription Payment Plan was introduced to help beneficiaries with high prescription drug costs spread their expenses out in monthly payments. You sign up for this program through your insurance carrier and receive monthly bills from them.
Changes to Benefits in 2025
Expanded Mental Health Care
During your yearly “Wellness” visit, your health care provider can also use a health risk assessment to better understand your social needs and refer you for appropriate services and support. This can include services from marriage and family therapists as well as mental health counselors.
Additional Caregiver Support
Medicare now covers training for caregivers to learn the skills necessary to care for you if your treatment requires a caregiver’s help. Also, some people living with dementia and their caregivers may be able to get more support though a new pilot program “Guiding an Improved Dementia Experience Model.” Talk to your provider for more information about this program.
Changes to telehealth coverage
Starting April 1, 2025, you must be in an office or medical facility located in a rural area for most telehealth services. However, you can still get certain telehealth services in your home no matter where you live. These are services offered from a doctor or other healthcare provider who is located somewhere else using technology to communicate with you in real time. Covered services include:
- Monthly End Stage Renal Disease visits for home dialysis
- Services for the diagnosis, evaluation, or treatment of symptoms of acute stroke wherever you are
- Services for the diagnosis, evaluation, or treatment of a mental and/or behavioral health disorder including substance abuse
Pre-exposure prophylaxis (PrEP) for HIV prevention
If you don’t have HIV, but your doctor determines you’re at an increased risk for HIV, Medicare will cover additional HIV preventive services. This includes PrEP medication, counseling services, and a one-time hepatitis B screening.
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