Medicare Costs Are Rising in 2025: What You Need to Know About Part D Expenses

Medicare enrollees face fluctuating costs each year, and 2025 brings notable changes. While most beneficiaries don’t pay premiums for Part A, which covers hospital care, premiums for Part B (outpatient care) and Part D (prescription drugs) are increasing.

In 2025, the standard Medicare Part B premium is rising from $174.70 to $185 per month. Additionally, Part A costs for hospital care, including deductibles and coinsurance, will also increase. However, specific factors may cause your Medicare Part D drug coverage expenses to rise even further. Here’s what to watch for:

1. Your Plan’s Premiums Are Increasing

Medicare Part D premiums vary by plan and can change annually. If you’re notified of a premium increase for your current plan, it may be worth shopping around during Medicare’s fall open enrollment period, which runs through December 7. Exploring other plans could help you find more cost-effective drug coverage.

2. Your Medications Are Moving to a Higher Tier

Medicare Part D plans group medications into different cost tiers, which determine your out-of-pocket expenses. If your prescriptions are shifted to a higher tier for 2025, you may face increased costs even if your plan’s premiums remain stable.

Consider switching to a plan that classifies your medications more favorably or explore generic or lower-cost alternatives for your prescriptions.

3. Surcharges for Higher Earners

If you’re a higher earner, you may be subject to an additional fee known as an IRMAA (income-related monthly adjustment amount) for your Part D coverage. IRMAA is based on income from two years prior. For some individuals, appealing the surcharge may be an option, especially if the income increase was temporary.

Preparing for Medicare Cost Changes

For retirees on a fixed income, budgeting for essential expenses is crucial. Understanding the factors contributing to rising Medicare Part D costs in 2025 can help you plan ahead and take action to mitigate financial strain. Whether it’s switching plans, exploring medication alternatives, or appealing a surcharge, proactive steps can help you manage these changes effectively.