12 Ways Medicare Coverage Has Changed (for the Better and the Worse)

Virtually all health insurance plans make tweaks to their costs and coverage each year.

For those on Medicare, the federal health care program for people who are 65 and older or have a qualifying disability, that means higher premiums, lower drug costs and some service restrictions in 2025.

Here’s a closer look at the latest Medicare changes.

1. Higher traditional premiums and deductible

Medicare is broken down into several parts, each with its own costs. Part A provides coverage for hospitalizations and inpatient care, while Part B covers doctor visits and outpatient care.

In 2025, premium and deductible costs for those on traditional Medicare, also known as Original Medicare — the type of Medicare offered directly by the government — are going up for both Part A and Part B.

These Part A costs in 2025 break down as follows:

• Part A deductible for the first 60 days of a hospitalization: $1,676 (up from $1,632 in 2024)
• Part A coinsurance for days 61 through 90 of a hospitalization: $419 per day (up from $408 in 2024)
• Part A coinsurance for lifetime reserve days: $838 per day (up from $816 in 2024)
• Part A skilled nursing facility coinsurance: $209.50 per day (up from $204 in 2024)

And here are the Part B cost increases for traditional Medicare for 2025:

• Part B standard premium: $185 per month (up from $174.70 in 2024)
• Part B deductible: $257 (up from $240 in 2024)

Those with a Medicare Advantage plan — the type of Medicare offered by private insurers — may have different costs.

2. Higher IRMAAs for Parts B and D

High-income seniors may end up paying even more for their Medicare.

In 2025, single taxpayers with a modified adjusted gross income (MAGI) in excess of $106,000 will pay an income-related monthly adjustment amount (IRMAA) for their coverage. IRMAAs also apply to married couples filing jointly who have MAGIs above $212,000.

IRMAAs apply to premiums for Part B and Part D, which covers prescription drugs. They are phased in over five levels and max out for single taxpayers with MAGIs of $500,000 or more and married couples with incomes of $750,000 or more.

With the IRMAA, the maximum Medicare premiums for 2025 are as follows:

• Part B: $628.90 per month (up from $594 in 2024)
• Part D: $85.80 per month (up from $81 in 2024)

3. A cap on out-of-pocket drug costs

While premiums and deductibles may be going up, out-of-pocket drug costs could go down for some Medicare beneficiaries.

The Inflation Reduction Act of 2022 included a cap on out-of-pocket drug costs for those on Medicare, and that provision went into effect in 2025. For this year, the cap is $2,000.

4. A new payment option for prescription drugs

Also new in 2025 is the option to sign up for a prescription payment plan. This will allow Medicare beneficiaries to pay their prescription drug costs over the course of a year.

Those who select the payment plan will receive a monthly bill from their health or drug plan rather than paying for prescriptions at the pharmacy. This doesn’t reduce your overall drug costs but is intended to make them more manageable.

5. No more Part D coverage gap threshold

Another provision of the Inflation Reduction Act has been slowly closing a gap in Part D prescription drug coverage.

In the past, Medicare beneficiaries with high prescription drug costs would hit a gap in their coverage that required them to pay for up to 25% of their medication costs while in the gap, which was also referred to as a “doughnut hole.” However, that gap has been eliminated for 2025.

6. Temporary price breaks for dozens of drugs

Dozens of medications will be cheaper for Medicare beneficiaries during 2025. This is also thanks to the Inflation Reduction Act, which requires temporarily lower coinsurance costs if a drug company raises the price of a medication by more than the rate of inflation.

You can see all the drugs affected by this temporary price break in “64 Drugs That Are Cheaper With Medicare This Month.”

7. Less telehealth

If you’ve gotten used to regular online check-ins with your doctor, this will be an unpleasant change for you. In 2025, telehealth visits — such those done via a video call — will only be covered if you are in an office or medical facility in a rural area.

There are some exceptions, though. For instance, some mental health services can still be accessed via telehealth from your home.

8. An annual social determinants of health risk assessment

Speaking of mental health, Medicare will now pay for an annual assessment that considers your social needs and refers you to appropriate services if needed.

Known as a “social determinants of health risk assessment,” it is free so long as it is conducted as part of your annual wellness visit.

9. Coverage for caregiver training

If you have a caregiver, Medicare may pay to have that person trained.

The training may be individual or provided in a group setting, but your health care provider is the one responsible for determining whether caregiver training is necessary. Assuming it is, the Part B deductible applies to the cost, and you will be responsible for covering 20% of the Medicare-approved amount for this service.

10. Coverage of inpatient respite care

Should you be enrolled in hospice, Medicare will pay for up to five days of inpatient respite care at a time. This care is intended to provide a break for family members or friends who may be caring for you.

Medicare notes that your hospice provider can make arrangements for these stays.

11. Support for dementia caregivers

Medicare launched the Guiding an Improved Dementia Experience (GUIDE) pilot program in 2024. The program includes Medicare coverage for a collection of services, including care management, caregiver education and respite services.

Nearly 400 organizations are participating in the program, and you can download a list of them from the website of the Centers for Medicare & Medicaid Services, the federal agency that runs the Medicare program.

12. Coverage for USPS employees

Previously, U.S. Postal Service retirees and their families received benefits through the Federal Employee Health Benefits Program. But beginning in 2025, they have been moved to a new Postal Service Health Benefits Program.

One notable difference is that certain Postal Service retirees will now need to enroll in Medicare Part B. That wasn’t a requirement under their prior benefits program.