No matter what type of Medicare coverage you have, it does not cover everything. This means you will be responsible for paying some out of pocket costs. It’s important to understand how your coverage works so you have no surprises. Here’s what you can expect for 2025.
Original Medicare
The term Original Medicare refers to Medicare Parts A and B. There are premiums, deductibles, and coinsurances associated with Original Medicare, and these change every year.
Part A Costs for 2025
Premium: If you or your spouse worked at least forty quarters Part A is free. If you don’t qualify for premium free Part A, you will pay either $285 or $518 per month, depending you your work history.
Deductible: In 2025 you will pay $1,676 for each inpatient hospital stay. This covers your share of costs for the first 60 days of a hospital stay, also known as benefit period. There is no limit to the number of benefits periods you can have in a year, which means you can pay this deductible multiple times.
Coinsurance: This will vary based on the length of your hospital stay:
- Days 1-60: $0 after you pay your Part A deductible
- Days 61-90: $419 per day
- Days 91-150*: $838 per day *Known as “lifetime reserve days” because Medicare will only pay for these extra days once in your lifetime
- Out-of-pocket maximum: none
Part B Costs for 2025
The standard Part B monthly premium will be $185 in 2025. You could pay more based on your income. You could also pay a late penalty if you did not enroll on time.
The Part B annual deductible will be $257. Once the deductible is met you will have a 20% coinsurance for the cost of covered services.
Because of Original Medicare’s high out of pocket costs, many Medicare beneficiaries choose to enroll in a Medicare Supplement Plan or Medicare Advantage Plan.
Medicare Supplement or Medigap Plans
These plans help cover the out of pockets costs not covered by Original Medicare. They are sold by private insurers and premiums will vary based on the plan you choose, the insurance carrier and where you live. There are ten different plans plus two high deductible plans each offering a different level of coverage. The more coverage the plan offers, the higher the monthly premium will be. Not all plans are offered in all areas.
In most states, if you did not enroll in a supplement plan when you were first eligible when you turned 65, you will be required to complete a health questionnaire. You could be denied coverage or charged a higher premium if you have health issues. These rules vary by state so you should check your state’s specific regulations.
Medicare Advantage or Part C Plans
Medicare Advantage (MA) plans must cover everything that Original Medicare covers. Most MA plans also include your Part D prescription drug coverage. Many MA plans offer ancillary benefits not covered by Original Medicare such as dental, vision and hearing benefits. Since these plans are offered by private insurers benefits will vary from plan to plan as will out of pocket costs.
Out of pocket costs may include a monthly premium (there are many $0 premium plans on the market), as well as deductibles, copays, and coinsurances for both medical services and prescription drugs. These plans also have an annual out of pocket maximum, capping the amount you will have to spend in a year. That cap will be $9,350 in 2025. You will still pay your monthly Part B premium and your Part A premium if you have one.
Part D Prescription Coverage
If you have a Medicare Advantage plan your Part D coverage is included in your monthly premium. You could have separate deductibles, copays, and coinsurances for your medications. These vary based on your plan and your insurer.
If you opted for Original Medicare, you will need to enroll in a stand-alone Part D plan. These are sold by private insurers and premiums, copays and coinsurance vary by plan. The maximum deductible that can be applied to Part D plans in 2025 is $590. You could also pay a late penalty if you did not enroll on time.
No matter what type of Part D coverage you have, you will be impacted by two significant changes in 2025:
- Elimination of the Coverage Gap or Donut Hole – There will be an annual $2,000 cap on out of pocket expenses for your medications. This means once your Part D deductible and any copays and coinsurances you paid for your medications total $2,000, your covered medications will be paid for in full by your insurer.
- Medicare Prescription Payment Plan – This newly created plan will allow you to spread the cost of your medications out over the year in monthly payments, helping to make high priced medications more affordable.
If You Can’t Afford Your Medicare Costs
If you struggle to afford your Medicare costs, there are programs to help if you qualify. This includes Medicare Savings Programs and Extra Help as well as Medicaid and your state’s pharmacy assistance program.
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