Article at a glance
- The Medicare Program can experience changes from year to year, so staying current on these changes benefits Medicare beneficiaries and new enrollees.
- A few significant changes are going into effect regarding Medicare in 2025 including a slight increase in costs, a cap on out-of-pocket expenses for prescription drugs, and coverage expansion for areas such as mental health and caregiver training.
- Medicare Advantage plans also experience some changes, including a new notice from MA plans that must be sent to beneficiaries informing them about unused benefits.
What is Medicare?
Medicare is a federal government-funded insurance option available to those at least 65 years old or with a disability. Medicare is comprised of three different parts:
- Part A (hospital insurance)
- Part B (medical insurance)
- Part D (prescription drug coverage)
Another option available is Part C, or Medicare Advantage (MA) plans. These plans are offered through private insurance companies and must provide the same coverage as Original Medicare. However, they may include additional incentives not covered by Medicare, such as vision or dental insurance.
Note: To learn more about Medicare, visit this source. To learn more about Medicare Advantage, visit this source. To learn more about Medicare Part D (Medicare’s prescription drug coverage) visit this source.
8 Changes to Medicare in 2025
The costs of Medicare change slightly each year. The changes for this year that this article will outline include:
- Part A Deductible Increase
- Part B Premium Increase
- Part C Changes (Unused Benefit Notifications)
- Part D Changes (Deductible Alterations)
- Limitations on Telehealth Coverage
- Expanding Caregiver Programs
- Expanding Mental Health Services
- Postal Service Health Benefit
1: Part A Deductible Increase
Part A covers the costs associated with short-term inpatient hospital stays, skilled nursing facility care, and nursing home care. If someone purchases Medicare Supplement insurance (such as a Medigap plan, Medicaid dual eligibles, or an MA plan), longer-term care may also be covered.
Premiums and deductibles tend to change slightly each year. Most eligible beneficiaries won’t have to pay a Part A premium unless they did not pay enough into their Medicare tax while working. For those who must purchase a Part A premium, the cost is either $285 or $518 per month. This number will depend on how much you or your spouse paid into Medicare tax while working. To learn more about Medicare eligibility and costs, visit this source.
The Part A deductible for 2025 is $1,676, an increase of $44 from 2024.
2: Part B Costs Increase Slightly
Part B covers costs associated with medical insurance, such as necessary medical services to diagnose and treat conditions and preventative services, such as vaccines and screenings. This year, slight changes have been made to Part B, including:
- Increased Premium
- Increased Deductible
The premium for Part B has increased from last year to at least $185 per month. However, this number increases based on your income. You can view your Part B premium for 2025 by visiting this resource.
The deductible for Part B, or what the beneficiary must pay before Medicare begins covering costs, is $257 in 2025, an increase of $17 from 2024.
3: Part C Change: Notification Of Unused Benefits
Another coverage option is Part C (Medicare Advantage Plans), which are offered by private insurance companies. The plans vary in their additional benefits, premiums, and deductibles.
This year’s notable change is that Medicare Advantage plans will be required to send a “Mid-Year Enrollee Notification of Unused Supplemental Benefits” in July 2025. This notice will allow policyholders to become aware of any supplemental benefits they haven’t used so they can get the most out of their plans. The notification will also cover the out-of-pocket costs of using each benefit and instructions on accessing and receiving these benefits.
4: Part D Changes
Medicare Part D (also known as prescription drug coverage) is an optional plan that helps cover the cost of medications. Plans vary in price, coverage, and benefits as they are offered by private insurance companies which differ in plan structure. The biggest changes to Medicare for 2025 directly impact Part D plans and Medicare Advantage plans that include a Part D addition. Part D changes include:
- New $2,000 cap on out-of-pocket costs
- New maximum deductible
Thanks to the Inflation Reduction Act, the most significant change involves a yearly $2,000 cap on out-of-pocket costs for prescription drugs. The cap includes deductibles, copayments, and coinsurance but does not cover premiums or medications not covered by the Part D plan.
This change also eliminates the coverage gap, or “donut hole,” that previously existed for Part D plans. Now, once an enrollee reaches the $2,000 limit, they will not pay out-of-pocket for covered drugs for the remainder of the year.
There are also changes to the cost of deductibles for these plans. While deductibles vary by plan, the maximum deductible for any Part D plan is $590, raised from $545 in 2024.
Note: While previously meant to go into effect in 2025, Executive Order 14087, which was intended to cap generic prescription drugs at $2 for Medicare beneficiaries, was overturned. This does not currently affect the $35 insulin price cap or the $2,000 out-of-pocket expenses for Medicare beneficiaries.
5: Limitations On Telehealth Coverage
Starting April 1st, 2025, coverage for telehealth services will be cut back significantly. Previously, Medicare could cover telehealth services from anywhere in the U.S., including your home. Now, these telehealth services will no longer be covered unless you live in a remote area or go to a medical office in a rural area.
There are a few exceptions to this, and you can still receive covered telehealth services without being in a rural area under certain conditions, such as:
- Monthly End-Stage Renal Disease (ESRD) visits for home dialysis.
- Services for diagnosis, evaluation, or treatment of symptoms of an acute stroke wherever you are, including in a mobile stroke unit.
- Services to treat a substance use disorder, a co-occurring mental health disorder (sometimes called a “dual disorder”), or for the diagnosis, evaluation, or treatment of a mental health disorder, including in your home.
- Virtual behavioral health services (mental health services), including in your home.
- Diabetes self-management training.
- Medicare nutrition therapy.
6: Expansion of Caregiver Programs
In 2025, Medicare will expand help to cover costs related to caregivers. This coverage expansion includes:
- Caregiver Training
- Hospice Assistance
- Dementia Support via new “GUIDE” model
This year, if a healthcare provider believes caregiver training is necessary, Medicare will help cover expenses for a caregiver to attend training programs to learn how to step into the caregiving role. These training programs can cover personalized caretaking techniques, how to administer medication properly, and more. While Medicare covers part of caregiving training, beneficiaries still must pay 20% of the cost and the Part B premium.
Additionally, Medicare will cover hospice care for beneficiaries receiving hospice services. To give caregivers a break, the care recipient can stay at a Medicare-approved facility for up to five days.
Finally, Medicare will also cover a new pilot program known as “Guiding an Improved Dementia Experience Model” (GUIDE), which is geared towards those diagnosed with Dementia, their families, and caregivers to help navigate the diagnosis and learn to support and care for those with the condition.
7: Continued Expansion of Mental Health Services
2025 continues the expansion of covered mental health services, including more thorough comprehensive assessments, such as questionnaires referred to as “social determinants of health risk assessments” during their annual wellness visit (AWV). Assessments can help beneficiaries determine specific issues and connect them with appropriate resources. Cognitive assessments to help determine potential dementia or cognitive impairment signs are also set to become a routine part of AWVs.
Additionally, a focus on addressing and identifying substance abuse (with a focus on opioids) will start this year. This involves reviewing pain management plans, offering non-opioid pain medications, and, if necessary, being referred to a specialist for treatment. Medicare will cover these services and will not charge the beneficiary. However, if the referred specialist performs services not covered by Medicare, the beneficiary will be responsible for coinsurance and deductibles.
Note: If you or someone you know is struggling with addiction, there is help. Please visit this resource or call 1–800-662-HELP (4357) for assistance with rehabilitation today.
8: Postal Service Health Benefits Program
Starting January 1st, 2025, United States Postal Service employees, retirees, and their families will move to a new Postal Service Health Benefits Program (PSHB). This program provides separate coverage from the previous plan for USPS beneficiaries, the Federal Employee Health Benefits Program (FEHB).
Beneficiaries must switch to a PSHB program before the new year to continue receiving Medicare coverage through the Postal Service. However, if you have coverage from a family member’s FEHB plan, you can continue with that coverage throughout 2025.
FAQ
What are the most significant changes coming to Medicare in 2025?
The biggest changes happening in Medicare in 2025 include:
- Capping out-of-pocket costs for prescription drugs at $2,000
- Medicare Advantage Plans must now send a “Mid-Year Notification of Unused Benefits” so beneficiaries can be aware of benefits they haven’t used yet.
- Telehealth coverage under Medicare has been significantly reduced, except for in offices and medical centers in rural areas or under certain conditions
- Expanding coverage to include programs for caregivers
- Expansion of Mental Health Coverage
- Postal Service Employees switched to a new program this year called “Postal Service Health Benefits Program.”
What is the premium for 2025?
The standard Part B premium in 2025 is $185, though this may increase depending on one’s income.
Is the Medicare “donut hole” going away in 2025?
Yes, thanks to the Inflation Reduction Act, the price cap for out-of-pocket costs for prescription drugs is capped at $2,000. Previously, the donut hole was a coverage gap that involved Medicare beneficiaries paying higher drug costs when they reached a specific spending limit until they reached catastrophic coverage. The new cap on this limit simplifies the process and eliminates the donut hole.
