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.

Most Medicare Advantage plan (Part C) premiums are lower

Are you enrolled in or considering a Medicare Advantage plan (Part C)? The average Part C premium is expected to decrease by $1.23 for 2025 at around $17. Many beneficiaries won’t see an increase.

Medicare Advantage plans can offer a robust selection of additional benefits, like hearing, dental and vision care, as well as gym memberships and travel coverage. Plus, most plans do not have a medical deductible and include Part D prescription drug coverage.

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)