Medicare is always evolving. Each year, Medicare coverage, premiums, deductibles and copayments/coinsurance are likely to change. Medicare programs may change as well, so it’s important to stay up to date. This way you’ll be able to make an informed decision if you find yourself needing to switch to a new Medicare plan.

So, what exactly is different for Medicare in 2025? We’ll go through the changes to help you get a better understanding of what they mean for you and your coverage.

Key Medicare premium changes in 2025

There are several changes to Medicare premiums in 2025 that will impact what you can expect to pay. But first, the big question: Will Medicare premiums go up in 2025? On average, yes, beneficiaries will see premiums increase slightly. Here’s what you can expect.

2025 Medicare Part A premiums

About 99% of Medicare beneficiaries don’t pay a Part A (hospital coverage) premium. However, for those without premium-free Part A coverage in 2025, monthly costs will be either $285 (a $7 increase from 2024) or $518 (a $13 increase from 2024). This cost depends on how long you worked and paid Medicare taxes. If your income is lower, you may be eligible for a Medicare Savings Program.

2025 Medicare Part B premiums

The standard monthly Medicare Part B (medical coverage) premium has increased to $185 – up $10.30 from 2024. Part B premiums are calculated on a sliding scale based on your adjusted gross income. For many, expected increases will be minor, but for some, they can be more significant. Just as with Part A, if you need help with costs, you may be eligible for a Medicare Savings Program.

2025 Medicare Part D premiums

Based on current enrollment, the average 2025 premium for Part D prescription drug coverage plans is projected to decrease slightly – from $53.95 last year to $46.50. This is largely due to changes implemented by the Inflation Reduction Act (IRA) passed in 2022.

Those who need help lowering prescription drug costs can work with their doctor to shift to generic brands or other lower-cost drugs, explore new plan options or apply for Medicare's Extra Help Program.

Part D coverage and benefit changes in 2025

While many aspects of your benefits and coverage will remain the same, 2025 is a big year for Medicare Part D. These are the key updates.

Is the Medicare donut hole going away in 2025?

Yes, the Part D coverage gap, also known as the donut hole, was eliminated in 2025, and that’s great news for enrollees who depend on prescription medicines.

Historically, the Medicare donut hole has been the third phase of Medicare Part D prescription drug coverage. While enrollees were in this phase of their coverage, they had to pay 25% for prescription medicines.

Now, Medicare has removed the donut hole, turning Part D coverage into a three-phase benefit, including:

• Deductible phase: The period during which you pay out of pocket for prescription medicines until you meet your plan’s specific deductible.
• Initial coverage phase: The period during which your plan starts to cover prescription drugs after you meet your deductible. During this time, you will still be responsible for copays and coinsurance.
• Catastrophic phase: The period during which you reach your out-of-pocket maximum for covered prescription drugs. Your plan then starts paying the total cost of drug coverage.

As part of this change, there will no longer be an initial coverage limit. Instead, you’ll pay your copays and coinsurance until you meet your out-of-pocket maximum of $2,000 for the year. The catastrophic phase will then kick in.

Lower prescription drug costs

Due to changes implemented by the IRA, the Centers for Medicare & Medicaid Services projects that Medicare Part D beneficiaries will save an average of 30% in annual out-of-pocket (OOP) prescription drug costs in 2025.

This year, Part D beneficiary OOP spending will be capped at $2,000. That means there will be no beneficiary cost-sharing above this threshold, so the most you will pay out of pocket for medicines in 2025 is $2,000. Knowing this in advance will allow Part D enrollees to budget for their year.

The Medicare Prescription Payment Plan

In 2025, the Medicare Prescription Payment Plan will go into effect. This program requires all Medicare prescription drug plans to allow enrollees to pay out of pocket for medicine costs in capped monthly installments instead of all at once at the pharmacy. This program may help you manage your expenses, but it doesn't save you money or lower your drug costs.

Medicare deductibles in 2025

For 2025, caps on annual deductibles for Medicare Part A, Part B and Part D have also increased. While costs may vary by plan, here are the maximum amounts you might have to pay to cover a deductible:

• Part A deductible: $1,676 (up from $1,632 in 2024)
• Part B deductible: $257 (up from $240 in 2024)
• Part D deductible: $590 (up from $545 in 2024)

Medicare has expanded coverage for certain health services in 2025

This year, Medicare is offering new resources, expanded coverage and reimbursement options for those with specific health care needs. This includes increased coverage of mental health care services, caregiver training, cardiovascular risk assessments and dental and oral health reimbursements. These changes will allow seniors more affordable options for health care.

More mental health services are covered by Medicare

In 2025, Medicare expanded coverage for mental health services and treatment, so seniors can have access to a more robust selection of mental health care providers. Medicare now reimburses a larger selection of mental health care professionals, including family therapists, marriage counselors and more. In addition, Medicare has also enhanced its opioid treatment program to allow for more telehealth treatment options, making care easier to access.

GUIDE: Caregiver training and resources for those with dementia

Earlier this year, Medicare launched the Guiding an Improved Dementia Experience (GUIDE) program. GUIDE was created to help support patients with dementia and their caregivers by offering additional resources, such as caregiver training.

This training will help caregivers learn how to better understand and manage their loved one’s medical condition in a way that best follows their treatment plan. This includes showing caregivers how to administer medicine, ways to safely move or transport the patient, effective communication techniques and much more.

Easier access to cardiovascular risk assessments

New in 2025, Medicare now covers atherosclerotic cardiovascular disease risk assessments, which can help reduce rates of heart attack and stroke among seniors. Providers will be reimbursed by Medicare for performing these assessments as part of evaluation and management doctor visits.

Dental care reimbursements for end-stage renal disease

Traditionally, Original Medicare does not offer dental coverage. However, it does reimburse beneficiaries for administered oral health services that are tied to medical conditions. In 2025, CMS added end-stage renal disease to the list of conditions that are eligible for reimbursement. This means that dental services that are medically necessary in relation to Medicare-covered ESRD dialysis are covered, and that includes exams, diagnosis and treatment services.