Medicare premiums and deductibles will increase in 2025 from 2024 levels, the government announced this week. To get the most from your plan, it’s important to understand your out-of-pocket costs, which will vary depending on your plan and income. You could also owe a monthly surcharge on Medicare Part B and Part D premiums based on an income-related monthly adjustment amount (IRMAA).
Medicare open enrollment is on and runs from October 15 to December 7 annually. You can switch from original Medicare to a Medicare Advantage plan, or vice versa during this period. You can also choose a new Advantage plan or Medicare Part D prescription drug coverage. Coverage will begin in 2025.
Here’s a rundown of what costs are now, in 2025, so you can be better prepared for Medicare open enrollment this year.
Medicare Part A deductible
The Part A deductible for hospital admissions will increase to $1,676 in 2025. That's an increase of $44, up from $1,632 in 2024. The Part A inpatient hospital deductible covers beneficiaries’ share of costs for the first 60 days of Medicare-covered inpatient hospital care in a benefit period.
There’s no limit to the number of benefit periods you can have in a year. This means you may pay the deductible more than once in a year.
For patients who are hospitalized for longer than 60 days, the coinsurance amount in 2025 is $419 a day, (up $11 from $408 in 2024), for the 61st through the 90th day of hospitalization. The coinsurance payment rises to $838 a day, up from $816 in 2024, starting on the 91st day of hospitalization. For beneficiaries in skilled nursing facilities, the daily coinsurance for days 21 through 100 of extended care services in a benefit period is $209.50, up $5.50 from $204 in 2024.
Medicare Part B monthly premium
In 2025, the standard monthly premium is $185, up $10.30 from $174.70 in 2024. The annual deductible for all Medicare Part B beneficiaries is $257 in 2025, $17 more than the 2024 deductible of $240.
Part B covers doctor visits, outpatient services, home health care, durable medical equipment and many preventive services. You usually pay 20% of the Medicare-approved amount for Part B-covered services after you meet your deductible. This amount is called your coinsurance.
High earners will pay more. The income-related monthly adjustment amount (IRMAA) is a surcharge for people with income above a certain amount that must be paid in addition to your Medicare Part B and Part D premiums. IRMAA is calculated every year. That means if your income is higher or lower year after year, your IRMAA status can change. If the SSA determines you must pay an IRMAA, you’ll receive a notice with the new premium amount and the reason for their determination.
Although the Centers for Medicare and Medicaid Services have released the IRMAA income brackets, they have not issued the Part B IRMAA surcharge amounts. However, Part D surcharges have been released, and range from $13.70 to $85.50 depending on income.
The surcharges for high earners are based on adjusted gross income (AGI) from two years earlier. Single beneficiaries with 2023 AGI of more than $106,000 and married couples filing jointly with 2023 AGI of over $212,000 will pay more in 2025. How much more is still unknown. Here are projections for 20205 Part B surcharge amounts. 2024 beneficiaries with 2022 AGIs of more than $103,000 for singles (more than $206,000 for married couples filing jointly) paid between $244.60 and $594.00 per beneficiary for Part B.
Out-of-pocket maximums and Medicare supplemental insurance. There’s no yearly limit on what you pay out of pocket unless you have supplemental coverage — such as Medicare supplement insurance or are enrolled in a Medicare Advantage plan. The maximum out-of-pocket limit for Medicare Advantage plans in 2025 is $9,350 for in-network services and $14,000 for in-network and out-of-network services combined.
Medigap insurance. You can buy Medigap insurance to help pay your remaining out-of-pocket costs such as your 20% coinsurance or co-payments. Medigap Plans K and L have out-of-pocket limits.
Medicare Part D prescription drug plan
The average premium for Part D, which covers drug costs, will be $46.50 monthly in 2025, down from $53.95 in 2024. Beginning in 2025, people with Part D plans won’t have to pay more than $2,000 in out-of-pocket costs.
The $2,000 cap will be indexed to the growth in per capita Part D costs, so it may rise each year after 2025. Part D enrollees will have the option of spreading out their out-of-pocket costs over the year rather than face high out-of-pocket costs in any given month.
Part D members would pay capped monthly installment payments over the course of the calendar year instead of all at once at the pharmacy. You can directly opt-in to the Medicare Prescription Payment Plan through your Part D plan sponsor.
This new rule applies only to medications covered by your Part D plan and does not apply to out-of-pocket spending on Medicare Part B drugs. Part B drugs are usually vaccinations or injections a doctor administers, and some outpatient prescription drugs.
A surcharge for high earners also applies to your Medicare drug coverage (Part D). In 2025, if your 2023 AGI is above $106,000 if you are single or $212,000 if you’re married and file jointly, you’ll pay an extra amount in addition to your plan premium. That surcharge ranges from $13.70 to $85.80. You’ll be liable for this surcharge if your Medicare Advantage Plan includes Part D drug coverage.
Medigap
Medicare doesn’t cover everything; the coverage gap is often called the “doughnut hole.” Part B pays for only 80% of doctor’s visits and other outpatient services. In addition, Medicare doesn’t cover supplemental services such as dental care, eye appointments or hearing aids. You have two options to deal with your uncovered expenses. You can purchase Medigap insurance to complement your Original Medicare insurance or enroll in a Medicare Advantage plan.
Medicare supplemental insurance or Medigap policies are offered by private insurers and cover deductibles and copayments. These policies are categorized by letters A through N. All plans offer the same basic benefits, no matter where you live or which insurance company you buy the policy from. Every policy that goes by the same letter must offer the same basic benefits; usually, the only difference is the cost.
Due to the phasing out of the popular Medigap Plan F, Plan G is now the plan of choice for many. The glaring difference is that Plan G does not cover the Part B deductible of $257 in 2025. Plan G also covers “excess charges” that doctors who don’t accept the Medicare-approved amount as full payment can charge you, up to 15% more for services and procedures. Anyone enrolled in Medicare before 2020 can still sign up for plans F and C.
Medicare Supplement Plan K and Plan L are cheaper than other Medigap policies and have an out-of-pocket limit. These two plans have lower monthly premiums since you’ll also share the coinsurance costs for your Plan K (50%) and Plan L (25%) up to your annual maximum limit.
Read What’s the Best Medigap Plan? to find out more about the 10 different Medigap plans you can choose from.
Medicare Advantage plans
Enrolling in a Medicare Advantage plan is an alternative to a Medigap plan This isn’t supplemental coverage. Advantage plans replace Original Medicare. Medicare Advantage Plans are sometimes called “Part C” or “MA Plans." To be clear, if you join a Medicare Advantage Plan, you’ll still have Medicare but you’ll get most of your Part A and Part B coverage from your Medicare Advantage Plan. You are prohibited from buying a Medigap plan with an MA plan.
These plans provide medical and prescription drug coverage through private insurance companies. Depending on the plan you choose, the monthly premium, in addition to Part B, will vary. The average monthly premium is $17.00 in 2025, down $1.23 from $18.23 in 2024. Advantage policies charge lower premiums than Medigap plans but may have higher deductibles and copayments, and your choice of providers may be more limited than with Original Medicare
There is a maximum out-of-pocket limit for Medicare Advantage plans, unlike Original Medicare. In 2025 your maximum expenses will be $9,350 for in-network services and $14,000 for in-network and out-of-network services combined. This is up from $8,850 for in-network services and $13,300 respectively in 2024. However, plans may set lower limits and these limits only apply to Parts And B and do not include Part D costs.
