Although Medicare helps cover the costs of most medical services, it’s essential that you still plan for out-of-the-pocket expenses and understand that it’s not truly “free” health care.
In this article, we’ll outline what to expect for Medicare costs in 2025 so that you can budget accordingly.
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Medicare Costs in 2025
Medicare beneficiaries are on the hook to cover the costs of premiums, deductibles, copays and penalties — all of which can vary depending on where you live and factors such as your income level.
These fees are adjusted annually due to inflationary pressures and fluctuations in health care costs. Medicare cost changes for the coming calendar year are typically set each spring and announced during open enrollment in the fall.
Medicare premiums and deductibles for 2025
| Medicare Part | Premium | Deductible | Notes |
| Medicare Part A (hospital coverage) | Free for most enrollees (those who paid federal income taxes for at least a decade). For those who must pay, the cap is $518 per month if you worked less than 7.5 years. For those who worked more than 7.5 years but less than 10 years, the premium is $285 per month. | $1,676 | The daily hospital coinsurance for days 61 through 90 is $419. The daily hospital coinsurance for lifetime reserve days is $838.
Skilled nursing is $0 for up to 20 days. Daily coinsurance is $209.50 for days 21 to 100. You pay 100% beyond 100 days. |
| Medicare Part B (medical insurance) | $185 per month on average | $257 | Income-related monthly adjustments may apply. |
| Medicare Part C (Medicare Advantage) | $17 per month on average | Deductibles vary by plan and are charged separately from the maximum out-of-pocket rate. The deductible must be met first. The maximum out-of-pocket rate in 2025 is $9,350. | These plans are issued by private companies that can dictate costs based on a range of factors. |
| Medicare Part D (prescription drugs) | $36.78 per month (national base beneficiary premium) | $590 | Income-related monthly adjustments may apply. Out-of-pocket costs will be capped at $2,000. |
| Medicare supplement plans (Medigap) | Premiums vary depending on the plan. | Deductibles vary by plan. High-deductible plans have lower monthly premiums and a $2,870 deductible that must be met before coverage kicks in. | Plans K and L have annual out-of-pocket spending limits of $7,220 and $3,610, respectively, in 2025. |
Source: Centers for Medicare & Medicaid Services
Medicare Part A (Hospital Coverage) Premiums and Deductibles
Most people don’t have to pay a Medicare Part A (hospital) insurance premium when they come of Medicare-eligible age — typically at age 65. The Medicare Part A average monthly premium for 2025 is $285. However, if you paid Medicare taxes for less than 30 quarters (by working and paying taxes for 7.5 years) during your life or have a disability and have exhausted other entitlements, Medicare Part A could cost you roughly $518 a month for 2025.
Deductibles are the money you must pay out of pocket for health care before your insurance coverage kicks in. In 2025, the Medicare Part A deductible is $1,676 during each benefit period. Once you’ve paid this amount, you’ll owe $0 for hospital stays lasting up to 60 days.
If your stay is longer than 60 days, you will pay daily coinsurance of $419 starting on day 61 and continuing through day 90 of your hospitalization. From days 90 to 150, the coinsurance amount increases to $838 per day.
[READ The Parts of Medicare Explained: What They Cover and What They Don’t]
Medicare Part B (Medical Insurance) Premiums and Deductibles
The cost of Medicare Part B is less. Medicare Part B (medical) insurance costs about $185 each month for 2025 for most people, but you’ll pay more if your individual income is more than $106,000. People who file jointly with their spouse will pay more if their joint income is more than $212,000.
The Part B deductible in 2025 is $257. After you pay this, you’ll be expected to pay 20% of the Medicare-approved amount for doctor and hospital services, outpatient therapies and durable medical equipment, such as blood sugar meters, walkers and commode chairs.
[Read: 5 Steps for Picking a Medicare Plan.]
Medicare Part C (Medicare Advantage) Premiums and Deductibles
Medicare Part C, also called Medicare Advantage, is fundamentally different from Medicare Parts A and B, which are often collectively referred to as “original Medicare.” That’s because Medicare Advantage plans are sold and managed by private insurance companies that are licensed through Medicare to offer plans for adults age 65 and older.
In comparison, original Medicare is managed by the federal government, and private insurance companies are not involved.
Premiums for Medicare Advantage plans vary based on the insurer and county. The average premium for a Medicare Advantage plan in 2025 is $17 per month, according to the Centers for Medicare & Medicaid Services.
Although your premiums may be lower with a Medicare Advantage plan, the network of doctors covered by the plan will likely be smaller. Medicare Advantage plans can also require prior approval before you’re able to obtain services, or they can deny coverage for health care you’ve received. However, with a Medicare Advantage plan, you won’t need a separate prescription drug plan, and some coverage for dental, hearing and vision care, as well as other benefits, may be included.
[READ Medigap vs. Medicare Advantage: Which Should You Buy?]
Medicare Part D (Prescription Drugs) Premiums and Deductibles
Medicare Part D is the prescription drug piece of Medicare. It’s not a requirement for beneficiaries to purchase this option, but if you don’t and decide later you want it, you’ll be hit with a late-enrollment penalty. (More information about that penalty follows below.)
If you’re on original Medicare and opt to purchase Part D health insurance to cover the cost of your prescription medications, as most people do, the CMS estimates that a stand-alone, basic premium, without a supplemental Part D plan, will cost you an average of $36.78 a month for 2025.
Premiums may vary from plan to plan. Similar to Part B, people with Medicare who have higher incomes will pay higher premiums for Part D plans. The Part D deductible will be $590 for 2025.
Medicare Supplement (Medigap) Premiums and Deductibles
Medicare supplement plans, also called Medigap, are intended to plug what’s often been referred to as the donut hole — the things original Medicare insurance doesn’t cover. Many seniors opt to take this supplemental insurance to defray the costs of health care needs that fall outside of the coverage bounds of Medicare Parts A and B. And note: You cannot purchase a Medigap plan with Medicare Advantage.
These supplemental insurance plans — lettered A, B, C, D, F, G, K, L, M and N — are offered by private insurance companies. They are designed to cover deductibles and copayments primarily. Depending on your plan, for instance, supplemental insurance may cover up to 100% of the Medicare Part A coinsurance and hospital costs up to a year after your Medicare benefits have run out, as well as other costs for Part B care.
The costs of these plans vary depending on the provider, the plan and where you live. Each company can set its own premium for Medigap policies, and some offer discounts to certain populations, such as nonsmokers or women.
The benefits provided by each Medigap plan are the same, no matter which company sells it. But deductibles can also vary depending on the specific plan. Medigap plans F, G and J, for instance, are high-deductible options that have a cap of $2,187 for deductibles in 2025.
Understanding Medicare Out-of-Pocket Maximums
Original Medicare (Parts A and B) has no out-of-pocket maximum.
“There is no cap on the limit that somebody can pay under Part B, and that’s usually one of the selling points of a Medicare Advantage plan, where Medicare Advantage plans do cap,” explains Joel Mekler, a health benefits professional, Medicare expert and writer of the “Medicare Moments” weekly column in the New Castle News in Pennsylvania.
The Medicare Advantage out-of-pocket maximum for 2025 is $9,350 for in-network services, according to the CMS.
“Deductibles have to be paid before the plan pays anything,” adds Jaime Fenimore, a Medicare specialist and broker out of Pittsburgh. “The plan keeps track of your copays and coinsurance throughout the year, and if the total ever reaches the MOOP (maximum out-of-pocket), the plan pays 100% of your costs for the rest of the year.”
Importantly, Medicare Advantage plans’ out-of-pocket maximums only include costs for Part A and Part B services. Any costs you pay for Part D drugs or for supplemental benefits, such as dental or hearing, do not count toward the maximum and are not included. Even if you reach your out-of-pocket maximum, you will still need to pay for your supplemental benefits and the cost-sharing for your prescription drugs.
Medical Costs Not Covered by Medicare
When preparing your budget, keep in mind that original Medicare doesn’t provide coverage for certain health care expenses, including:
— Nonmedically necessary foot care
— Routine dental visits
— Cosmetic surgery, such as Botox
— Routine vision care
Also, should you need more than 100 days of skilled nursing care, original Medicare won’t pay for it.
“You may be in a hospital, and there’s a difference between being under observation in a hospital and being admitted to a hospital. Medicare will cover one, being admitted, and may have some restrictions on observation,” explains Shub Debgupta, founder and CEO of Precision Health, a health analytics company based in Arlington, Virginia.
All individuals with a Part D plan, either a stand-alone drug plan or a Medicare Advantage drug plan, also need to look at the formulary — the list of covered medications — very closely. Some drugs, for instance, might be covered under Medicare Part B rather than a Medicare Part D prescription drug plan.
Examples of drugs covered by Part B insurance include injectable osteoporosis medications and oral cancer drugs, which are typically administered in your doctor’s office.
Important Medicare Changes
Changes related to the recently passed Inflation Reduction Act of 2022, are shaping Medicare premiums and deductibles for 2025, especially with the costs of some prescription medications. The aim is to improve access to affordable treatments by expanding benefits and holding drug premiums stable. Adjustments include:
— A cap of $35 per month for insulin
— A $0 cost for Part D-recommended vaccines
— A cap of $2,000 on out-of-pocket costs for Part D-covered prescription medications
— An option to enroll in the Medicare Prescription Payment Plan, which lets beneficiaries make monthly payments toward their prescription drug costs
How to Find a Plan
There are many options for Medicare and Medicare Advantage plans available to you, and wading through them all can feel overwhelming. But it’s important to get information and compare plans to find the most cost-effective one that will meet your needs.
You can start your search by connecting with your local Area Agency on Aging, where you can access resources and guidance from local advisers and others who might be able to assist you. If you’re considering enrolling in a Medicare Advantage or Medicare Part D plan, you can also search for the Best Medicare Advantage and Part D Companies in your area.
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Navigating Medicare Deductibles and Premiums in 2025 originally appeared on usnews.com
Update 11/18/24: This story was published at an earlier date and has been updated with new information.
