What's changing with Medicare costs in 2025

Yes, Medicare costs are going up in 2025. The Part B premium — the monthly charge for doctor visits and outpatient care — will be $174.70 per month for most people, up from $164.90 in 2024. The Part A deductible for hospital stays rises to $1,676 per benefit period, from $1,632. Part D prescription drug coverage premiums vary by plan, but most will increase. These changes take effect January 1, 2025.

The increases are tied to medical cost inflation and changes in the Social Security cost-of-living adjustment (COLA). In 2025, Social Security benefits are rising 2.5 percent, which is lower than recent years. This smaller COLA means the premium increases hit harder for people on fixed incomes, even though the percentage rise in premiums themselves is modest.

If you receive Social Security, your Part B premium is usually deducted automatically from your benefit check. You will see the new amount starting in January. If you pay your premium directly to Medicare, you will receive a notice by December showing your 2025 amount.

Key Takeaways

  • Part B premiums rise to $174.70 per month in 2025, an increase of about $10 from 2024.
  • Part A hospital deductible increases to $1,676 per benefit period, affecting what you pay when admitted to the hospital.
  • Part D prescription drug premiums vary by plan and region, so comparing your options during open enrollment can lower your costs.
  • If you have a Medigap or Medicare Advantage plan, your premiums may also increase, and you should review your coverage during the annual enrollment period.

Part B premium increases and who pays them

The Part B premium covers 25 percent of the cost of doctor services, outpatient hospital care, and medical equipment. The remaining 75 percent comes from general tax revenue. When medical costs rise faster than expected, the premium rises to keep up.

Most people on Medicare have the premium taken directly from their Social Security check. If your benefit is less than $174.70, you pay the difference separately to Medicare. If you do not receive Social Security, you pay Medicare directly by mail or online.

Some people may have access to for Part B premium subsidies through Medicaid if their income is low enough. The income limits vary by state. If you think you might may have access to, contact your state Medicaid office or call 1-800-MEDICARE to ask about your state's rules.

Part A deductible changes and hospital costs

Part A covers inpatient hospital stays, skilled nursing facility care, and some home health services. When you are admitted to the hospital, you pay the Part A deductible — $1,676 in 2025 — before Medicare begins to pay. After you meet the deductible, Medicare covers all costs for the first 60 days of the hospital stay.

If your hospital stay extends beyond 60 days, you enter a period where you pay coinsurance: $419 per day for days 61 through 90, and $838 per day for days 91 through 150. These coinsurance amounts also increase each year. After 150 days, you pay all costs yourself unless you have a Medigap plan that covers the gap.

The deductible resets each benefit period, which runs from the day you are admitted until 60 days after you are discharged. If you are admitted twice in one calendar year but the admissions fall in different benefit periods, you pay the deductible twice.

Part D prescription drug costs and plan changes

Part D premiums are set by individual insurance companies and vary widely by plan and location. Some plans will increase by a few dollars; others by $20 or more. The average increase across all plans is typically 5 to 10 percent, but your specific plan's increase depends on the insurer's claims experience and local drug prices.

During the annual open enrollment period — October 15 through December 7 each year — you can switch to a different Part D plan at no penalty. If your current plan's premium or formulary (the list of covered drugs) is changing in a way that affects you, this is the time to compare other plans. You can use the Medicare Plan Finder tool at Medicare.gov to see all available plans in your area and their 2025 costs and coverage.

Part D also has an out-of-pocket spending cap. In 2025, once you and your plan have spent $8,550 out of pocket on covered drugs, you enter catastrophic coverage and pay only a small coinsurance amount for the rest of the year. This cap also increases annually.

Medicare Advantage and Medigap premium changes

Medicare Advantage plans (Part C) bundle Part A, Part B, and usually Part D into one plan run by a private insurance company. Premiums, deductibles, and copays vary by plan and insurer. Many Advantage plans have $0 premiums but charge copays when you use services. In 2025, some plans will lower premiums while others raise them; the changes are not uniform across the industry.

Medigap plans are supplemental policies sold by private insurers that cover the gaps in Original Medicare — deductibles, copays, and coinsurance. Medigap premiums are set by the insurance company and can increase based on age, claims experience, and the insurer's costs. There is no annual enrollment period for Medigap; you can switch plans any time, though you may face medical underwriting if you are not in an open enrollment period.

If you have either type of plan, your insurer will send you a notice by December 1 showing your 2025 premium and any changes to your coverage. Review this notice carefully, because some plans change their copays or formularies even if the premium stays the same.

How to prepare for 2025 Medicare costs

Start by reviewing the notices Medicare and your insurers send in November and December. These will show your exact 2025 premiums and any coverage changes. Do not assume your costs will stay the same.

If you have a Part D plan, use the Medicare Plan Finder during open enrollment to compare all available plans. Switching to a plan with lower premiums or better coverage for your specific drugs can save hundreds of dollars per year. The tool is free and takes about 15 minutes.

If you have a Medigap or Medicare Advantage plan, check whether your out-of-pocket costs are rising significantly. If they are, research other plans in your area. You can also contact 1-800-MEDICARE to ask about programs that help pay premiums if your income is low.

If you are turning 65 in 2025 or newly may be able to access for Medicare, enroll during your initial enrollment period. Missing this window can result in permanent late-enrollment penalties added to your premiums for life.

Income-based premium adjustments (IRMAA)

If your income is above a certain threshold, you pay a higher Part B and Part D premium. This is called the Income-Related Monthly Adjustment Amount (IRMAA). In 2025, the income thresholds and adjustment amounts have changed, and some people will move into a higher bracket.

IRMAA is based on your modified adjusted gross income from two years prior. So your 2025 IRMAA is based on your 2023 income. If your income dropped significantly in 2023 or 2024 — due to retirement, job loss, or a major life event — you can request a recalculation by contacting Social Security or Medicare. You will need to provide documentation of the change.

The higher IRMAA brackets affect fewer people than in past years, but if you have substantial non-Social Security income, investment income, or a working spouse, you may be subject to the adjustment. Your Social Security statement will tell you if IRMAA applies to you.

Frequently Asked Questions

Will my Social Security benefit increase cover the Medicare premium increase?

The 2025 Social Security COLA is 2.5 percent, while the Part B premium increase is about 6 percent. For most people, the benefit increase will not fully offset the premium rise. You will likely see a smaller net increase in your take-home benefit after the new premium is deducted.

Can I delay enrolling in Medicare to avoid the 2025 increases?

No. If you miss your initial enrollment period when you turn 65, you will pay a permanent late-enrollment penalty for as long as you have Medicare. The penalty is 10 percent of the Part B premium for each full year you delayed. It is better to enroll on time and manage the costs than to avoid enrollment.

What if I cannot afford the new premiums?

Contact your state Medicaid office or call 1-800-MEDICARE to ask about premium information programs. Some states offer help paying Part B and Part D premiums for people with low income. You may also may have access to for the Part D Low-Income Subsidy program, which helps pay prescription drug costs.

Do I have to switch plans during open enrollment?

No, but you should review your options. If your current plan's costs or coverage are not changing in a way that affects you, staying put is fine. If premiums are rising significantly or your drugs are no longer covered, switching could save you money or may support you keep access to the medications you need.

When do the 2025 changes take effect?

All premium and deductible changes take effect January 1, 2025. If you receive Social Security, the new Part B premium will be deducted starting with your January benefit. If you pay directly, your first bill at the new rate will arrive in December or January.