Orlando Harmon
Medicare costs are set to increase in 2024 and 2025, with the standard monthly premium for Medicare Part B enrollees rising to $174.70 in 2024 and $185 in 2025. The annual deductible for Medicare Part B will also increase to $240 in 2024 and $257 in 2025. These increases are mainly due to projected increases in healthcare spending and a rise in the number of people using healthcare services. Additionally, the Part A premium, which covers hospital stays, is expected to increase to $518 per month in 2025, with deductibles rising by 2.7%. For those with a Medicare Advantage plan, it is important to review any changes in coverage and costs, especially regarding prescription drugs, as some insurers may reduce coverage and increase costs.
| Characteristics | Values |
|---|---|
| Medicare Part B Premium for 2024 | $174.70 |
| Increase in Medicare Part B Premium from 2023 | $9.80 |
| Annual deductible for all Medicare Part B beneficiaries for 2024 | $240 |
| Increase in annual deductible for all Medicare Part B beneficiaries from 2023 | $14 |
| Medicare Part A Premium for 2024 | $505 |
| Medicare Part A Premium for 2025 | $518 |
| Medicare Part B Premium for 2025 | $185 |
| Annual deductible for all Medicare Part B beneficiaries for 2025 | $257 |
| Increase in annual deductible for all Medicare Part B beneficiaries from 2024 | $17 |
| Percentage increase in Medicare Part A deductibles in 2025 | 2.7% |
| Percentage increase in Medicare Part B premiums in 2025 | 5.9% |
| Percentage increase in Medicare Part B deductibles in 2025 | 7.1% |
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What You'll Learn
Medicare Part B premium to increase in 2024
The Centers for Medicare & Medicaid Services (CMS) announced that the standard monthly premium for Medicare Part B enrollees will increase in 2024. From $164.90 in 2023, the premium will go up by $9.80 to $174.70 for 2024. This increase is mainly due to projected increases in healthcare spending and, to a lesser degree, the remedy for the 340B-acquired drug payment policy for the 2018-2022 period under the Hospital Outpatient Prospective Payment System.
The annual deductible for all Medicare Part B beneficiaries will also increase in 2024. It will be $240, a rise of $14 from the annual deductible of $226 in 2023. The Medicare Part A inpatient hospital deductible that beneficiaries pay if admitted to the hospital will also be higher in 2024, at $1,632, an increase of $32 from $1,600 in 2023.
The monthly premiums for Medicare coverage vary based on factors such as the policy purchased, the enrollee's location, and their income level. For instance, certain uninsured individuals who have fewer than 30 quarters of coverage and certain individuals with disabilities will pay a higher premium of $505 per month in 2024, a $1 decrease from 2023.
The Medicare Savings Programs (MSPs) help over 10 million people with Medicare premium coverage, and the Part D low-income subsidy (LIS) helps pay for the Part D premium and lowers prescription drug costs. People with limited incomes and resources may also receive assistance from their state in paying premiums and other expenses.
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Medicare Part A deductible to increase in 2024
On October 12, 2023, the Centers for Medicare & Medicaid Services (CMS) released the 2024 premiums, deductibles, and coinsurance amounts for the Medicare Part A and Part B programs.
The Medicare Part A inpatient hospital deductible that beneficiaries pay if admitted to the hospital will be $1,632 in 2024, an increase of $32 from $1,600 in 2023. This is the amount you’d pay if you were admitted to the hospital. The Part A deductible is not an annual deductible; it applies to each benefit period. A benefit period starts at hospital admission and ends when you’ve been out of the hospital or skilled nursing facility for 60 consecutive days.
In 2024, beneficiaries must pay a coinsurance amount of $408 per day for the 61st through the 90th day of a hospitalization ($400 in 2023) in a benefit period and $816 per day for lifetime reserve days ($800 in 2023). For beneficiaries in skilled nursing facilities, the daily coinsurance for days 21 through 100 of extended care services in a benefit period will be $204.00 in 2024 ($200.00 in 2023).
The standard monthly premium for Medicare Part B enrollees will be $174.70 for 2024, an increase of $9.80 from $164.90 in 2023. The annual deductible for all Medicare Part B beneficiaries will be $240 in 2024, an increase of $14 from the annual deductible of $226 in 2023. The increase in the 2024 Part B standard premium and deductible is mainly due to projected increases in healthcare spending and, to a lesser degree, the remedy for the 340B-acquired drug payment policy for the 2018-2022 period under the Hospital Outpatient Prospective Payment System.
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Medicare Part B premium to increase in 2025
The Medicare Part B premium will increase in 2025, with the standard monthly premium for enrollees rising to $185, a $10.30 increase from 2024. This rise is due to projected price changes and an increase in the number of people using healthcare services, which is consistent with historical trends.
The Medicare Part B premium, deductible, and coinsurance rates are determined annually according to the Social Security Act. The premium increase for 2025 follows a decrease in 2023, with rates rising again by 5.9% in 2025. The annual deductible for Medicare Part B beneficiaries will also increase to $257, a rise of $17 from the previous year.
The Part B premium is based on an individual's income, with roughly 8% of people with Medicare Part B affected by these income-related monthly adjustment amounts. The total premiums for high-income beneficiaries with full Part B coverage or only immunosuppressive drug coverage will be higher.
The Part A premium will also increase in 2025, with a monthly cost of up to $518, a $13 rise from 2024. This amount depends on how long the beneficiary or their spouse paid Medicare taxes. Those who worked between 30 quarters and 10 years will pay a lower premium of $285.
It is important to note that Medicare Advantage plan members should review any changes to their coverage and costs, especially regarding prescription drugs. While the Centers for Medicare and Medicaid Services do not anticipate widespread reductions in coverage, it is crucial to stay informed about any modifications in your plan's annual notice of changes letter.
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Medicare Part A deductible to increase in 2025
Medicare Part A covers inpatient care, skilled nursing, hospice, and some home health services. The Medicare Part A deductible for inpatient hospital services will increase by $44 in 2025 to $1,676, as announced by the Centers for Medicare and Medicaid Services. This is an increase from the 2024 rate, which was $278 per month for those who buy into Part A at a reduced monthly premium rate, and $505 per month for certain uninsured individuals who paid the full premium.
The Part A daily coinsurance amounts will also change in 2025. For days 61-90 of hospitalization in a benefit period, the coinsurance amount will be $419 per day. For lifetime reserve days, the coinsurance will be $838, and for days 21-100 of extended care services in a skilled nursing facility in a benefit period, the coinsurance will be $209.50.
The monthly Part A premium, paid by beneficiaries with fewer than 30 quarters of Medicare-covered employment and certain people with disabilities, will increase by $13 in 2025 to $518. Certain voluntary enrollees eligible for a 45% reduction in the monthly premium will pay $285.
It is important to note that Medicare costs can vary based on factors such as income, location, and the specific policy chosen. Additionally, there is no yearly limit on out-of-pocket expenses unless individuals have supplemental coverage, such as a Medicare Supplement Insurance (Medigap) policy or a Medicare Advantage Plan.
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Medicare Advantage plans may change in 2025
In addition, the prescription drug coverage gap, known as the "donut hole," will be eliminated. This is replaced with the Medicare Part D cap of $2,000, which will reduce costs for enrollees. The Medicare Prescription Payment Plan is a new voluntary option, allowing enrollees to spread their out-of-pocket drug payments throughout the year. This will not lower costs but will provide more flexibility for payments.
Some Medicare Advantage plans have reduced services to compensate for lower government payments. This includes a reduction in benefits such as over-the-counter medication coverage, transportation services, and in-house support. The share of plans offering these benefits has declined, with 85% offering over-the-counter benefits in 2024, dropping to 72% in 2025. The share of plans offering transportation benefits has also decreased from 36% in 2024 to 29% in 2025.
Despite these changes, the percentage of Medicare Advantage plans with no premium in 2025 remains similar to 2024, with two-thirds of plans with Part D prescription drug coverage (67%) charging no premium. Additionally, nearly a third (32%) of Medicare Advantage plans will offer a reduction in the Medicare Part B premium in 2025, an increase from 19% in 2024.
Overall, these changes to Medicare Advantage plans in 2025 aim to lower medication costs and out-of-pocket expenses for enrollees, while also expanding coverage for certain services and drugs.
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Frequently asked questions
The standard monthly premium for Medicare Part B enrollees will be \$185.00 for 2025, an increase of $10.30 from $174.70 in 2024. The annual deductible will be $257, an increase of $17 from 2024.
You will pay a monthly premium of $278 in 2024.
You will pay \$505 a month in 2024, a $1 decrease from 2023.
If you have a higher income, you will pay an additional premium amount for Medicare Part B and Medicare prescription drug coverage. This is called the "income-related monthly adjustment amount".
