The Centers for Medicare & Medicaid Services is sketching out changes coming to Medicare in 2025. Right now, the CMS has details on what to expect for Medicare Part D plans and intends to fill in details for Parts A, B and C in the coming weeks and months. In 2025, more rules from the 2022 Inflation Reduction Act will kick in, which has the potential to dramatically affect how much participants pay for medications.
Each year, the Social Security Administration determines what the costs associated with the Medicare program will be. It then either raises or lowers premiums and deductibles using rules set out in the Social Security Act. The CMS is expected to fill in Medicare 2025 changes over the coming weeks and months.
We’ll continue to provide updates as more plan details are released for 2025, but below are some changes you can expect to see. For more, here’s the Social Security payment schedule and four ways you can lose your Social Security benefits.
When will we learn about changes to Medicare Part A?
Part A helps pay for inpatient care you get in hospitals, critical access hospitals and skilled nursing facilities. Almost 99% of Medicare beneficiaries get Part A for free because they paid Medicare taxes while working, according to the Centers for Medicare & Medicaid Services. Last year, the CMS announced the 2024 changes to Part A on Oct. 12, 2023.
When will we learn about changes to Medicare Part B?
Part B covers medical services like doctors’ services and outpatient care. Part B is optional, and for 2024, Part B’s premium is $174.70 per month. The CMS announces annual adjustments to Part B in the fall, so we’ll have to wait a bit before we can get the full details for 2025.
Medicare Part C updates
Medicare Advantage, or Medicare Part C, will also be receiving some updates. Part C plans come from private companies and can offer extra coverage, such as vision, hearing, dental and health and wellness programs.
Pricing for this alternative varies by the plan you choose. An upcoming change to Part C will remind enrollees what they could be potentially leaving on the table. For Medicare Advantage participants, starting in 2025, a mid-year notification will inform you of any unused benefits that are available that you can take advantage of.
This will both remind you to use your benefits and reassess whether you need the specific plan they signed up for. When reenrollment time comes around, you will be able to make a more informed decision about whether you should stay with your current plan or switch to a new one.
Several Medicare Part D Changes in 2025
Part D can help cover costs of prescription drugs. So, what’s new with Medicare Part D for 2025? The Inflation Reduction Act will bring a host of changes to Part D plans this year. We’ll break it down.
Base premium increase expected
According to the CMS, the Part D base beneficiary premium will increase by $2.08, or 6%, from $34.70 to $36.78. The IRA adds in a 6% cap to the base Part D plans, but actual premiums may vary. CMS said it will release preliminary Part D premium averages later this summer.
New $2,000 out-of-pocket maximums for medications
A big 2025 change for Plan D enrollees will be the $2,000 out-of-pocket maximum per year for medications. This change could have some major benefits for enrollees that have expensive medications they need to take on a monthly basis.
Note that medications covered under Medicare Part B will not count toward this maximum, as these are typically provided by a doctor or practitioner at a facility.
The Coverage Gap (doughnut hole) is gone in 2025
In 2024, there were four stages of coverage. Deductible, Initial, Coverage Gap (known as the donut hole) and Catastrophic. The Coverage Gap is a temporary limit on what the drug plan will cover for drug costs. In 2025, Medicare will eliminate the donut hole coverage gap, further simplifying coverages. Now, with the new out-of-pocket max of $2,000, Plan D participants will need to pay they’re deductible (up to $590), then make copayments until they reach the new maximum, getting them to the next level of coverage faster than previous years.
New Medication payment plan options
A new payment plan option will enable people to pay for their medications over the course of the year in the form of a payment plan instead of up front. The new plan allows someone to opt-in to this payment plan and spread the payments out for the remainder of the months in the year, and payments may not exceed a certain amount. The payment plan is opt-in only.
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