As projected, the costs related to Medicare are set to rise in 2025 due to adjustments in prices along with a surge in people utilizing health care services. Specifically, seniors will face a 2.7% cost increase for hospital stays covered under Part A, and an upswing in monthly premiums for medical coverage (Part B) by 5.9%, from $174.70 to $185. Furthermore, those making use of these services will encounter a 7.1% increase in deductibles, moving from $240 to $257. Out-of-pocket costs could potentially be covered by certain Medicare Supplement plans, but none cater to the Part B premium.
During Medicare's open enrollment period, it's possible to switch from Original Medicare (Parts A and B) to Medicare Advantage (Part C). Medicare Part A primarily covers inpatient hospital stays and nursing facilities, along with home health care and hospice care. Most individuals do not pay premiums for Part A as their Medicare taxes over the span of at least 10 working years usually suffice to waive the premium. However, if a premium needs to be paid, it could reach up to $518 per month in 2025, a $13 increase from 2024, and this depends on the length of time spent paying Medicare taxes either by you or your spouse.
While Part B covers regular medical care such as doctor’s visits, vaccinations, medical equipment, outpatient procedures, etc., the premium is primarily determined by income, as measured by modified adjusted gross income (MAGI) using your most recent tax return. Higher income equates to higher premiums. Premiums for Medicare Part B coverage will automatically be deducted from your Social Security checks if you're enrolled in Original Medicare.
Looking at 2025, there are many changes coming to Medicare in addition to the adjustments in premiums and deductibles for Original Medicare coverage. These changes apply to Medicare Advantage, and some select changes apply to all Medicare options. Despite Medicare costs rising at a higher rate than average Social Security payments, it’s crucial to remember the potential rise in out-of-pocket expenses due to increased deductibles. Experts recommend exploring various Medicare Advantage plans as they might better align with your budget and healthcare needs.
If you have a Medicare Advantage plan, it's vital to review any updates concerning your plan's coverages and costs. While some changes that Medicare mandates in 2025, such as drug spending caps, might cause private insurers to curtail coverage and promote costs, The Centers for Medicare & Medicaid Services doesn't anticipate this on a substantial scale. Nonetheless, it is of utmost importance to read your plan's annual notice of changes to ensure you are informed.