Medicare is constantly evolving to adapt to the needs of older Americans, and several significant changes have been incorporated into the program in 2025. If you’re a Medicare beneficiary — or soon will be — it’s important to understand how these changes will affect your coverage, costs, and access to services. Here’s a breakdown of four important Medicare changes for 2025:
1. Higher Medicare Costs for Parts A and B
In 2025, Medicare beneficiaries can expect higher premiums for both Part A (hospital insurance) and Part B (medical insurance), following a general trend of annual increases. These increases are part of the ongoing adjustments that occur each year to keep Medicare’s funding in balance.
While the exact amounts you’ll pay may vary depending on your income and other factors, the base Part B premium for 2025 has risen to $185 per month (an increase from $174.40 per month in 2024). For many seniors, this will pose a challenge, particularly for those with fixed incomes. Premiums for Medicare Part B have been steadily increasing over the past decade, and 2025 is no exception. The rise in premiums is driven by the overall costs of health care, including prescription drugs.
The Part B annual deductible has also increased – to $257 (up from $240 in 2024).
Additionally, Part A deductibles and co-pays have increased for 2025. For instance, the Part A inpatient hospital deductible for 2025 is $1,676 (up from $1,632 in 2024). Medicare beneficiaries who need to stay in a hospital or skilled nursing facility for a period of time also may have to cover coinsurance costs, which have also gone up compared with the prior year.
2. Monthly Payments Option for Medicare Part D Prescription Drug Plans
Starting in 2025, there is another notable change in how Medicare Part D handles prescription drug coverage. Beneficiaries now have the option to spread out the cost of their Part D prescription drugs over 12 months.
This update will not reduce your total out-of-pocket costs for your prescription medications, per se. However, it does offer more predictable costs for your medications. This can be especially helpful for those who regularly rely on medications and have trouble paying for them in full when they pick them up from the pharmacy.
3. Coverage of Certain Telehealth Services Extended Through March 2025
Telehealth services have been a game-changer for many Medicare beneficiaries, particularly those in rural areas or with limited mobility.
Medicare initially offered temporary coverage for telehealth during the COVID-19 pandemic. This included virtual visits with doctors, mental health counselors, and other health care providers. The expanded access meant that beneficiaries will no longer were limited to in-person visits for many types of consultations, offering greater convenience and flexibility in managing their health care needs.
Telehealth has proven especially beneficial for managing chronic conditions, mental health services, and routine consultations that do not require an in-person visit. Beneficiaries should check with their health care providers to see if they’re offering telehealth services that are covered under Medicare.
In response to the growing demand for virtual health care, lawmakers are seeking to ensure that Medicare continues to cover telehealth services in 2025 and beyond. As of this writing, the American Relief Act of 2025 has temporarily extended certain telehealth services for Medicare enrollees through March 31, 2025. However, it is not yet clear whether all of these telehealth flexibilities will continue, as Congress will have to revisit this issue.
4. New Cap on Out-of-Pocket Costs for Prescription Drugs
In 2025, there will be a significant improvement to the way prescription drug costs are managed under Medicare. Under the Inflation Reduction Act, a cap has been introduced on out-of-pocket spending for Part D prescription drugs. This cap will limit the amount beneficiaries must pay for their medications each year to $2,000, providing much-needed relief to those who rely on costly medications.
Under the new rules, once Medicare beneficiaries hit this cap, they will not have to pay additional costs for their covered medications for the remainder of the year. This change is particularly important for those with chronic conditions or serious health issues that require expensive prescription drugs. The cap will help to make drug costs more predictable and manageable, ensuring that seniors aren’t burdened with excessive expenses related to their medications.
In 2026, Some Reduced Pricing on the Horizon
One other important change is in the works, although it will not take effect until 2026. At that time, Medicare beneficiaries will begin seeing significant savings on 10 high-cost prescription drugs. These medications, identified as some of the most expensive and commonly prescribed, made them a priority for cost reduction during pricing negotiations led by lawmakers last year.
Among these drugs are treatments for conditions such as diabetes, certain cancers, and heart disease, which often require ongoing medication.
By reducing the costs of these essential drugs, Medicare aims to improve access to necessary treatments, allowing beneficiaries to focus on their health rather than their finances.
This initiative not only provides immediate financial relief but also encourages better adherence to prescribed treatment plans. When patients can afford their medications, they are more likely to take them as directed, leading to better health outcomes overall. As these changes roll out, Medicare beneficiaries can look forward to a more sustainable approach to managing their health care costs, ultimately enhancing their quality of life.
Learn More About Medicare and Medicaid
As is typical of health insurance and health care, Medicare and its related plans have nuances and limitations. It is especially important to understand that Medicare is very limited in its coverage of long-term care. Long-term care is expensive and continues to increase in cost. Medicaid is a joint federal and state program which can assist those with long-term care expenses.
While Medicare provides very limited coverage, Medicaid is much more extensive. However, because of its restrictions, qualifying for Medicaid can be extremely difficult. But paying for home care, assisted living, and nursing home without it could be all but impossible. Navigating the complex rules of Medicaid on your own could be a nightmare at best and subject you to penalties at worst. Fortunately, though, our experienced professionals can guide you through the Medicaid maze. Our legal team can advise you throughout the application process, ensuring that you (and your spouse, if applicable) retain the maximum income and total assets allowed by law.
If you have questions about how to plan for Medicaid, contact the elder law attorneys at Kurre Schneps for a consultation.
