Medicare costs go up most years, and 2025 shows the pattern

Medicare premiums, deductibles, and out-of-pocket limits change every January. For 2025, Part B premiums increased, Part A deductibles rose, and the amounts you pay before coverage kicks in shifted across all parts of the program. The exact increase depends on which part of Medicare you use — Original Medicare (Part A and Part B) has different costs than Medicare Advantage or Part D prescription drug coverage.

The increases are set by the Centers for Medicare & Medicaid Services (CMS) based on expected healthcare costs for the coming year. They are announced in the fall, so you see the new numbers before they take effect on January 1. If you are on Social Security, your benefit may increase to help offset some of the Medicare premium rise — this is called the "hold harmless" rule — but it does not always cover the full increase.

Key Takeaways

  • Medicare Part B premiums and Part A deductibles increase most years, with the exact amounts announced each October for the following January.
  • Social Security beneficiaries may receive a benefit increase to offset some or all of the Part B premium rise, depending on how much their benefit grew that year.
  • Medicare Advantage and Part D drug plans set their own premiums and cost-sharing, so increases vary by plan and insurer.
  • You can review your coverage and switch plans during the Annual Enrollment Period (October 15 to December 7) if your costs are rising faster than you expected.

How Part A and Part B premiums and deductibles change

Part A (hospital insurance) does not have a monthly premium for most people who paid Medicare taxes while working. However, the deductible — the amount you pay before Part A coverage begins — increases yearly. For 2025, the Part A deductible is higher than 2024, and you pay this amount for each hospital stay.

Part B (medical insurance for doctor visits and outpatient care) has both a monthly premium and a yearly deductible. The Part B premium for 2025 increased from 2024. If you have higher income, you pay an additional amount called an Income-Related Monthly Adjustment Amount (IRMAA). This means higher earners pay more than the standard premium.

The Part B deductible — what you pay before Part B starts covering your doctor and outpatient costs — also went up for 2025. After you meet the deductible, you typically pay 20 percent of the cost for most services, and Medicare pays 80 percent.

What happens if you are on Social Security

If your Social Security benefit increases in a given year, the "hold harmless" rule usually protects you from a large Part B premium jump. This rule says your Social Security payment cannot go down just because Medicare premiums rose. In practice, this means your benefit increase may be used to cover some or all of the premium increase.

However, hold harmless does not explore to everyone. If you are not yet on Social Security, if you are a higher earner paying IRMAA, or if your Social Security benefit did not increase that year, you will see the full premium increase on your Medicare bill. You pay the difference out of pocket or from other income.

The Social Security Administration and CMS coordinate these numbers, but the timing can be confusing. Your Social Security statement will show your new benefit amount, and your Medicare statement will show your new premium. If the premium increase is larger than your benefit increase, you will need to budget for the difference.

Medicare Advantage and Part D drug plan costs

If you have Medicare Advantage (Part C), your plan's premium, deductible, and copays are set by the insurance company, not by Medicare directly. Some plans have zero premiums, while others charge monthly. Premiums and cost-sharing can increase year to year, and increases vary widely by plan and by region.

Your Medicare Advantage plan's costs for 2025 were announced in October 2024. If your plan's costs are rising significantly, you have the right to switch to a different plan or to Original Medicare during the Annual Enrollment Period (October 15 to December 7 each year).

Part D (prescription drug coverage) premiums and deductibles also change yearly and vary by plan. Some plans increase premiums, others lower them. The standard Part D deductible for 2025 is set by CMS, but individual plans may have higher deductibles or different cost-sharing structures. If your medications are becoming more expensive under your current plan, you can switch to a different Part D plan during Annual Enrollment.

Why Medicare costs increase

Medicare costs rise because healthcare itself becomes more expensive. Hospitals, doctors, and drug manufacturers raise their prices, and the cost of medical technology and services grows. CMS calculates expected spending for the coming year and adjusts premiums and deductibles to match.

Inflation in the broader economy also affects Medicare costs. When wages, supplies, and labor costs go up, healthcare providers pass those costs along. Additionally, as the Medicare population ages and people live longer, the program serves more beneficiaries, which affects overall spending projections.

Congress sets the structure of Medicare — which parts exist, what they cover, and how much beneficiaries pay — but CMS sets the dollar amounts each year based on actuarial estimates. This is why you see changes announced every fall.

How to plan for cost increases

Review your Medicare costs now, before January. Look at your current premiums, deductibles, and what you actually spent out of pocket last year. Compare that to what you expect to pay in 2025. If costs are rising faster than your income, you have options.

During the Annual Enrollment Period (October 15 to December 7), you can switch to a different Medicare Advantage plan, switch from Medicare Advantage back to Original Medicare, or change your Part D drug plan. You can also add or drop Medigap coverage (supplemental insurance) during this window. Each choice has different costs and coverage, so comparing plans side by side is worth the time.

If you have limited income, you may be able to get help paying premiums and cost-sharing through the Medicare Savings Program or the Low-Income Subsidy program for Part D. These programs are run by your state, and income limits vary. Your local Area Agency on Aging or a Social Security office can tell you whether you may be may be able to access and how to learn more.

Frequently Asked Questions

When do Medicare costs go up each year?

Medicare costs change on January 1 each year. CMS announces the new premiums, deductibles, and out-of-pocket limits in October of the previous year. This gives you time to review your coverage during the Annual Enrollment Period (October 15 to December 7) before the changes take effect.

Will my Social Security go up enough to cover my Medicare premium increase?

Not always. The hold harmless rule protects Social Security beneficiaries from a net decrease in their monthly payment, but it does not may provide the increase will cover the full Medicare premium rise. If your benefit increase is smaller than your premium increase, you will pay the difference from other income. Higher earners paying IRMAA do not receive hold harmless protection.

Can I switch Medicare plans if my costs are going up too much?

Yes. You can change plans during the Annual Enrollment Period each October 15 to December 7. You can switch between Medicare Advantage plans, move from Medicare Advantage to Original Medicare, or change your Part D drug plan. You can also add or drop Medigap supplemental coverage during this window.

What if I cannot afford my new Medicare costs?

Several programs help pay premiums and out-of-pocket costs if your income is low. The Medicare Savings Program and the Low-Income Subsidy for Part D are both state-run. Contact your local Area Agency on Aging, your state Medicaid office, or call 1-800-MEDICARE to learn whether you may be may be able to access and what the income limits are in your state.

Do all Medicare Advantage plans increase their costs the same way?

No. Each insurance company sets its own premiums, deductibles, and copays. Some plans may lower costs while others raise them. This is why comparing plans during Annual Enrollment is important — a plan that was affordable last year may cost more in 2025, and a different plan might be cheaper for your situation.