Medicare Explained - Changes for 2025

Lots of big changes coming to Medicare in 2025. I'm reviewing them all today, so stay tuned. Today I'm going to review the changes to Medicare Parts A and B for 2025, as well as how your income will impact those changes. We'll also review changes to Medicare Part D, Medicare Advantage Plan, and Medicare Supplement or Medigap Plan changes. So we'll cover a lot of ground, but as always, we'll make it as simple and concise as possible for you. So if you're new to Medicare for 2025, this will be a great video to watch. And if you've been on Medicare for years, I think you'll find a lot of really important, valuable information here as well. One of the biggest changes that impact seniors on Medicare is how much you pay for your Medicare premiums. Now, many people wrongly assume once they turn 65 that Medicare is free, but it isn't. Now, traditional Medicare is made up of Parts A and B. That is your hospital and your medical coverage. And while for most people, Part A is free, for Part B, you do have to pay a monthly premium. In 2025, the standard Part B premium will be $185 per month, and that's an increase from the $174.70 per month that it was in 2024. Now, if you're collecting Social Security benefits, that monthly premium automatically comes out of your Social Security benefit check. But if you're not yet collecting Social Security benefits, then that is a premium payment that you make directly to Medicare. Medicare either bills you directly for those Medicare premiums, or you also have the option of setting up a Medicare EasyPay, so you can get those premiums deducted from your checking account. Now, the standard premium is $185 a month for 2025, but if you are a high-income earner, then you may actually have to pay more than that for your Part B and Part D premiums. Now, Medicare looks back at your income from two years prior, so they look at your Modified Adjusted Gross Income from 2023 when they are determining your 2025 Medicare premiums. So the chart here on the screen shows you, based on your Modified Adjusted Gross Income for 2023, what you could expect to pay for your Part B and Part D premiums. Now, if you're thinking, wait a minute, I maybe made a lot of money in 2023, but my situation has changed. I've retired, or I've had a life change, and now I make significantly less. Why am I getting this IRMA penalty? Well, the good news is you can appeal these IRMA charges as long as you've had a qualifying life event, like you've retired, you're working fewer hours, you're divorced or widowed, et cetera. Now, I've attached the appeal form in the video description below, so you can look at that if you think this situation may apply to you. Now, Medicare Parts A and B Traditional Medicare covers a lot. Essentially, it's going to cover anything that your doctor deems medically necessary as far as hospital and medical services. But it doesn't pay at 100%, so you still have some out-of-pocket responsibility in the form of deductibles, co-pays, and coinsurance. And those deductible and coinsurance amounts can change every year. For example, for Medicare Part A, if you have an inpatient hospital stay, in 2025, your deductible is $1,676 per 60-day benefit period. So it's not a calendar year deductible. It's a benefit period deductible. Now, that deductible covers you for the first 60 days as an inpatient in the hospital. But then after that, you're responsible for an inpatient coinsurance amount of $419 per day for days 61 through 90. After day 90, the coinsurance amount goes up to $838 per day using your lifetime reserve days. Additionally, when it comes to skilled nursing facilities, different than inpatient, if you are admitted to a skilled nursing facility, then Medicare covers your first 20 days in the skilled nursing facility. Then after that, you're responsible for a coinsurance amount of $209.50 per day for days 21 through 100, and then responsible for all costs after that. And when it comes to Medicare Part B, which is your medical coverage, that covers a whole slew of things like doctor's office visits, outpatient procedures, physician's fees if you're in the hospital, things like diagnostic testing, durable medical equipment, even many cancer treatments or non-self-administered medications are covered by Medicare Part B. So that's your medical insurance. Medicare Part B has a deductible as well. In 2025, the deductible is $257 per year. It's a $17 increase from last year when it was $240. And that's the amount that you have to pay first to your doctor before your Medicare coverage kicks in. And then after it kicks in, everything is 80-20 for Medicare Part B. That means that Medicare pays 80% and you're responsible for the other 20% of your Part B services. And this might sound like a lot of out-of-pocket responsibility with all of these deductibles and coinsurance amounts, but most people on Medicare will look into getting some type of coverage to help cap that out-of-pocket exposure. And essentially, there's two different options for you when you're on Medicare. Most people on Medicare will choose either one path or another to receive their Medicare benefits. And I'll talk about each path and the differences here, but on path number one, you're going with traditional Medicare Parts A and B that we just talked about. And most people will add on a standalone Medicare Part D prescription drug plan to cover their prescription medications. Since Part A is hospital, Part B is medical, Part D is what covers your prescription drugs. Now, there are some really big changes happening to Medicare Part D in 2025. I've made a few videos about this that I'll link in the video description below. One change is that the standard Part D deductible has increased to $590 for 2025. Now, you don't have to meet that deductible for all medications. Many generic medications actually have a $0 deductible on most drug plans. But if you have a higher cost brand name or higher tier medication, you likely do have to satisfy a deductible on most drug plans, the standard one being $590 for 2025. And the really big change happening to Medicare Part D for 2025 is the $2,000 out-of-pocket spending limit for covered drugs. Now, this $2,000 cap is new and it's going to help a lot of people. However, it is a little bit more complicated than it sounds, as expected, right? They make Medicare about as complicated as it can be. So for example, when talking about the $2,000 annual spending cap, the only costs that count towards that $2,000 are the amount that you pay for covered medications every year. So if a certain drug isn't covered on your Part D drug plans formulary, then any amount that you pay for that medication doesn't count towards the $2,000 cap. It's only covered drugs that count towards it. Additionally, if you opt for an enhanced Part D drug plan over a basic Part D drug plan, then you actually may spend less than that $2,000 cap before you've reached that catastrophic limit. Without getting too much in the weeds on it, it has to do with the way they count the total cost of that prescription medication against the Part D drug plan that you have. All this to be said, the very best way to choose a Medicare Part D drug plan is to do a search based on your specific medications that you take. So there are several different ways to do this. I've linked more information in the show notes below that you can hop on over to medicare.gov, plug in your zip code, your preferred pharmacies, and a list of all of the different drugs that you take or expect to take. And it will show you all of the different Part D drug plans ranked by total annual lowest out-of-pocket cost for the year. When you add up the monthly premium of the drug plan itself, which they can vary in premium, some drug plans are $0 a month, others are $100 a month. So it factors all of that in, the premium, the deductible, how much you're gonna pay for your medications, and it will show you which drug plans will be the best value for you for 2025. And if you visit our website at findingpartd.com, I have information there on how to do a search on the government Medicare website. There's also information about how to use different search tools. So go ahead and check that out. Now, back to the two different paths that we were talking about. If you continue down path one and you have traditional Medicare, you're likely adding on a Part D drug plan. Most people here will also want to add on a Medigap, also known as a Medicare supplement plan to supplement their traditional Medicare benefits. These plans work with traditional Medicare and they pay the deductibles and the coinsurance amounts for you so that you don't have to pay them. The nice thing about these plans are because they are supplemental to your traditional Medicare benefits, they don't have any networks. So you can always choose any Medicare doctor anywhere in the country, no matter where you live or no matter where you're traveling to. And these benefits are standardized and they never change. So that means that the plans are guaranteed renewable for life. Your plan benefits can never change as long as you continue to pay your monthly premium, your plan can never be canceled on you. So once you enroll in a Medicare supplement plan, you're kind of grandfathered in. So no matter where you move or choose to live, or if there are any changes that happen, you're grandfathered into the benefits of the plan that you chose. So essentially, these plans don't ever change from year to year. Now, of course, the plan premiums, the amount that you pay for these plans can and do increase every year. But unlike Medicare's premiums, they don't all automatically increase every January 1st. In most situations, your premium increases are going to happen around your policy anniversary date. So let's say that you were new to Medicare, turning 65 in March, and you signed up for a Medicare supplement plan for a March 1st effective date. Your rate increase on your Medicare supplement plan is likely going to happen around March 1st every year. The one place that we do see changes on Medicare supplement plans are on the high deductible plans, like the high deductible plan F and the high deductible plan G. Now, the high deductible that Medicare establishes for those plans can increase every year. It typically does based on inflation. This year, the deductible's $2,870 per year, and that's a $70 increase from 2024. I have lots of videos that talk all about Medicare supplement plans, which plans are the best, which are the most popular. I've linked them below. But if you have one of the more popular Medicare supplement plans, which are going to be plan G, plan N, they are the two most popular for 2025, those plans don't cover the Medicare Part B deductible. They cover just about everything else, but they don't cover the Part B deductible, which, as I mentioned before, for 2025 is $257 per year. So that means if you have traditional Medicare and one of those Medigap plans, then you're responsible for the first $257 of your medical expenses each year before Medicare and your Medigap plan kick in. Now, the other option, the other path you can choose to go down when it comes to receiving your Medicare benefits is to enroll in a Medicare Advantage plan, also known as Part C of Medicare. Now, this is an optional way to receive your Medicare coverage. About half of seniors on Medicare will choose to go this route. And Medicare Advantage plans do have their own pros and cons. Again, I'm gonna link a video below talking more in-depth about the pros and cons of Medicare Advantage. But it's important to know that Medicare Advantage plans are calendar year contract plans. So this means that the plans renew their contract with Medicare every year, and the plans can and do change from year to year. Now, every year, your plan has to send you an annual notice of change document, and usually they send it in September. It reviews the changes to your plan for the upcoming year, and you should definitely review this annual notice of change document when you receive it every fall. Now, any Medicare Advantage plan that includes Part D prescription drug coverage rolled right into the plan must adhere to Medicare Part D guidelines. So you will see that $2,000 cap on any Medicare Advantage plan that includes prescription drug coverage. And additionally, we are seeing that many Medicare Advantage plans that last year had low to no drug deductible, this year do now have a higher prescription drug deductible. Also, the 2025 trend that we're seeing is that the maximum out-of-pocket limit on many Medicare Advantage plans is increasing. So in 2025, we're seeing a Medicare Advantage max out-of-pocket limit, again, this is for medical and hospital, of $9,350 for in-network services. Now, that doesn't mean that all Medicare Advantage plans will have that high of a maximum out-of-pocket limit, but that is the new highest maximum out-of-pocket limit that Medicare has established for 2025. Now, keep in mind that if you have a Medicare Advantage plan and you want to change it, you've looked at the changes to your plan for 2025 and you wanna shop around for a new plan, you have two opportunities every year to change your Medicare Advantage plan if you have one. The first is during the annual election period. This is from October 15th to December 7th each year. And if you make changes during this timeframe, they will go into effect January 1st of the following year. And then you also have something called the Medicare Advantage open enrollment period. This is from January 1st to March 31st each year. It's only for people on a Medicare Advantage plan. So you can't change your Part D plan or anything like that during this time. It's just for people that have a Medicare Advantage plan and want to make a change. So those are the two chances per year that you have to change your Medicare Advantage plan. Now, a lot of people will ask when looking at these two different paths, two different options, what do I choose? What is the right one to choose? If you're new to Medicare or even you're just shopping your plan this year. Now, this really is one of the most important, if not the most important decision that you can make when you're on Medicare, is whether you choose to go with traditional Medicare and a Medicare Supplement plan or a Medicare Advantage plan. And the reason it's so important is because in most states, you cannot just flip-flop back and forth each year. Depending on your health, you might be stuck in the path that you chose. So let me explain a little bit more. And when it comes to Medicare Supplement plans, also known as Medigap plans, these plans are medically underwritten plans in most states. That means that the insurance company can ask you a list of health questions on the application, they look at your preexisting conditions, they look at your medications, and then they can decide whether or not they want to approve your application for coverage. They can deny you if they want to, they can charge you a much higher premium if they want to. The only time they cannot do this is when you are brand new to Medicare. And that means you are new to Medicare Part B. You have a one-time, six-month enrollment period in which you can choose any Medicare Supplement plan with any insurance company, and you are guaranteed to be approved for coverage. They can't ask you any questions. Now, once that window closes, if you want to get a new Medicare Supplement plan, then you may have to pass through medical underwriting to qualify. So if you start with a Medicare Advantage plan, or you currently have a Medicare Advantage plan, and you want to switch over to traditional Medicare with a Medicare Supplement plan, you may or may not be able to. It's going to depend on where you live and your health. In some states, like I mentioned, the rules are different. A video that I've linked below goes over those state-specific rules. And there are also some guaranteed issue rights, things like a trial right that will allow you to try out a Medicare Advantage plan and then return to a Medicare Supplement plan within a one-time, 12-month window. So I've linked more information below that talks about those guaranteed issue right protections. So it's really important to understand this when you are choosing what type of Medicare plan to go with. Now, here in my office, we work with both Medicare Advantage plans and Medicare Supplement plans. We are licensed in 46 states. We work with over 30 different insurance companies, and our service is completely free of charge. We're not a huge call center. I don't have hundreds of agents here in my office. There's a small group of us that I work very closely with, and we work to help seniors understand their options and help them determine what is going to be the best coverage at the best price for their needs. So we would love it if you give us a call. We'd love the opportunity to assist you. Many people find us right here online and reach out to us, and so we'd love the chance to help. And if you don't work with us, I hope you find another great independent, you wanna look for an independent broker to work with that can really be knowledgeable about helping you shop for all of your different options and understand the ins and outs of what type of Medicare plan you're choosing. I hope this video helped you to understand the changes to Medicare for 2025. Thanks so much for watching, and we'll see you soon.