As Medicare recipients know, your share of the total program costs can change each year. These costs can take many different forms including monthly premiums, deductibles, and coinsurance for care that you receive.
The Centers for Medicare & Medicaid Services announce costs for the upcoming year each November and recently released information for 2025. Overall, your costs could increase modestly next year.
Medicare Part A Costs in 2025
Medicare Part A covers inpatient hospital visits as well as other services provided by qualified healthcare professionals. Some of the additional services covered by Part A are skilled nursing care, inpatient rehabilitation, and hospice.
Part A is available with no monthly premium to Americans who worked or whose spouse worked more than 40 quarters in a qualifying job during their lifetime. However, it is still subject to deductibles and coinsurance.
If you are admitted to the hospital, you will owe the Medicare Part A deductible. This amount will increase from $1,632 to $1,676 for each spell of illness in 2025. If your stay is under 60 days, this is the only cost you will owe. On the other hand, if your stay lasts between 60 and 90 days, you will also owe a daily coinsurance amount. This will increase from $408 to $419 per day in 2025. For stays longer than 90 days, you begin to use your lifetime reserve days, which require a higher coinsurance payment. This amount will rise from $816 to $838 per day in 2025.
You may also owe coinsurance for a stay in a skilled nursing facility that lasts longer than 20 days. This amount will increase from $204 to $209.50 in 2025 for days 21 – 100. Medicare stops paying for skilled nursing care after day 100.
The chart below summarizes Medicare Part A costs in 2025.
Medicare Part B Premiums in 2025
Medicare Part B covers outpatient services that are not covered by Part A. Some of the covered services include doctor visits, outpatient hospital services, some home health services, and durable medical equipment.
Unlike Part A, Medicare Part B requires each recipient to pay a monthly premium. This amount will increase from $174.70 to $185 in 2025. In addition to the monthly premium, Part B recipients are subject to an annual deductible. This amount will rise from $240 to $257.
Medicare Part B and Part D IRMAA
In addition to the standard Part B premiums, high earners are subject to an Income Related Monthly Adjustment Amount [IRMAA]. This figure is based on your income and increases your monthly costs for Part B and Part D.
If your income is below $106,000 and you file taxes as Single or Married Filing Separately or your income is below $212,000 and you file taxes as Married Filing Jointly, you are not subject to IRMAA. On the other hand, if your income is above these limits, you are subject to higher monthly costs detailed in the chart below.
IRMAA is based on your Modified Adjusted Gross Income [MAGI] from your tax return two years ago. This is defined as your Adjusted Gross Income from line 11 of your 1040 plus tax exempt interest on line 2a of your 1040. If you’ve had a life changing event since then – like marriage, divorce, or loss of income – you can appeal this additional cost. Contact an experienced financial advisor for more information about the appeal process.
Medicare Part D Out-Of-Pocket Expenses in 2025
The Inflation Reduction Act included key changes for Medicare Part D that took effect over the past several years. In 2025, another change is coming – a cap on prescription drug spending. Your costs will be capped at $2,000 out-of-pocket for drugs covered under your Part D plan. After that point, you will automatically get catastrophic coverage, meaning you won’t owe any additional Part D out-of-pocket costs for the remainder of the year.
Another change to Part D payments coming in 2025 is the addition of the Medicare Prescription Drug Payment Plan. This plan is mandatory for all standalone prescription drug plans and Medicare Advantage plans with prescription drug coverage. It allows you to spread out-of-pocket costs across capped monthly payments rather than owing them all at once at the pharmacy.
The legislation also included changes for insurance companies. In turn, your costs, coverage, and networks could change for Medicare supplement and advantage plans. Be sure to review your coverage carefully this year and make any necessary changes before the end of open enrollment on December 7th.
Review Your Medicare Coverage with Meld Financial
When you have questions about your Medicare costs and coverage, turn to our team for assistance. We have spent forty years helping clients achieve their dream retirement and have the experience to answer your most pressing questions.
Throughout our decades of experience helping clients achieve their retirement goals, we developed a proprietary wealth management program – Financial Fingerprint®. This nimble plan brings together the most important aspects of your financial life – including government benefits – into one easy to understand plan.
To learn more about Financial Fingerprint® and get started, contact a member of our team today.
