If you are on Medicare or about to enroll, 2025 will bring a few important price shifts that can affect your monthly budget and your out-of-pocket risk. The standard Part B premium rises about 6 percent to $185 per month, and the Part B deductible ticks up to $257. What you pay will still hinge on your coverage choice, your prescriptions, and your income. High earners may see added monthly surcharges under the IRMAA rules, which are based on 2023 tax returns for 2025. The good news is that Part D drug spending now has a clear ceiling at $2,000, which can help tame surprise pharmacy bills during the year.
What is changing for 2025
Part B becomes more expensive for most people, with the premium climbing to $185 from $174.70 and the annual deductible moving to $257 from $240. Prescription coverage gets a mixed update: the average standalone Part D premium is expected to be about $46.50 per month, down from $53.95, while a new $2,000 out-of-pocket cap limits what you pay for covered Part D medications. Many beneficiaries consider Medicare Advantage because the average premium for these plans is projected at $17 per month in 2025, down slightly year over year. Open Enrollment runs October 15 to December 7, which is the window to switch between Original Medicare and Medicare Advantage, change Advantage plans, or adjust your Part D plan. Your best outcome comes from looking beyond premiums and calculating your total expected costs for the year.
Part A hospital costs in 2025
Part A covers inpatient hospital care and some skilled nursing facility stays. The inpatient deductible is $1,676 per benefit period in 2025, which is $44 higher than in 2024. A benefit period starts when you enter the hospital and ends after you have been out for 60 days, and there is no annual limit on the number of benefit periods. That means you could owe multiple Part A deductibles in a single year if you have separate hospitalizations. For extended hospital stays, coinsurance applies after day 60: $419 per day for days 61 through 90, and $838 per day for days 91 and beyond when using lifetime reserve days. In a skilled nursing facility, expect $209.50 per day in coinsurance for days 21 through 100 of a benefit period.
Part B medical costs and IRMAA
Part B covers office visits, outpatient services, many preventive services, some home health care, and durable medical equipment. The standard monthly premium is $185 in 2025 and the annual deductible is $257. After you meet the deductible, you typically pay 20 percent of the Medicare-approved amount for covered services. Higher-income enrollees may owe an additional IRMAA surcharge based on 2023 adjusted gross income above $106,000 for single filers or above $212,000 for those married filing jointly. The Part B surcharge ranges from $74.00 to $443.90 per month, which brings the total monthly Part B premium for affected beneficiaries to $259.00 to $628.90. The Social Security Administration reassesses IRMAA each year and sends notices that explain amounts and the reason; appeals are possible if you have had a qualifying life-changing event.
Part D drug coverage and the new $2,000 cap
Part D plans in 2025 average about $46.50 per month, but the headline change is the new $2,000 annual cap on out-of-pocket costs for covered Part D medications. This ceiling can bring meaningful relief to people managing high-cost therapies. You can also opt into a monthly installment program through your Part D plan that spreads your expected out-of-pocket drug costs across the year rather than paying large amounts at the pharmacy counter. The installment feature and the cap apply only to medications covered under Part D, not to Part B drugs such as many physician-administered injectables or certain vaccines. Higher-income enrollees may also see a Part D IRMAA surcharge ranging from $13.70 to $85.80 per month, which is added to the plan premium and applies even if drug coverage is bundled within a Medicare Advantage plan.
Original Medicare, Medigap, and Medicare Advantage
Original Medicare does not include an annual cap on what you might spend out of pocket, so many people add Medigap to control costs. Medigap policies are standardized by letter from A through N and coordinate with Original Medicare. Plan G is widely used by newer enrollees; it covers Part B excess charges up to 15 percent above Medicare’s approved amount but does not cover the Part B deductible of $257 in 2025. Plans F and C remain available only to those who were first eligible for Medicare before 2020, while Plans K and L trade lower premiums for cost sharing and include annual out-of-pocket limits. Medicare Advantage combines Part A and Part B, typically includes Part D, and cannot be paired with Medigap. Advantage plans must set annual caps on medical spending of no more than $9,350 for in-network care and $14,000 for combined in and out-of-network care in 2025, although plans can choose lower limits, and prescription costs under Part D do not count toward these medical maximums.
How to choose during Open Enrollment
Start by comparing total annual costs rather than focusing on any single premium. Add up premiums, deductibles, copays, coinsurance, and your expected prescription costs, and factor in the new $2,000 Part D cap along with the monthly installment option if cash flow is a concern. If you are considering Medicare Advantage, confirm that your doctors, hospitals, and pharmacies are in network, and review the plan’s drug formulary and any rules such as prior authorization or step therapy. If you plan to stay with Original Medicare, consider a Medigap policy to limit exposure since there is no built-in annual cap on Parts A and B. Check whether your 2023 income will trigger IRMAA surcharges for 2025, and if your income has dropped due to a qualifying event, consider an appeal with Social Security. Finally, verify the Medicare Advantage maximum out-of-pocket for medical costs or the Medigap benefits that fit your health needs and budget.
Looking ahead
All 2025 figures above are current, and the Centers for Medicare and Medicaid Services will publish finalized 2026 amounts later in the fall. Keep an eye out for updates that could influence next year’s premiums, deductibles, and plan designs. The right Medicare setup rarely stays right forever, so review your coverage each year during Open Enrollment, especially if your health, prescriptions, or income have changed. Spending a little time now can prevent costly surprises later and help you make the most of the protections Medicare offers.
