Key Takeaways

• In 2025, changes to Medicare plans could either increase your benefits or limit them depending on your plan update and whether you review your options in time.

• You must understand new rules around out-of-pocket caps, prescription drug costs, and plan networks to avoid unexpected expenses or coverage gaps.

What’s New in 2025 That Could Affect Your Medicare Benefits

Every year, Medicare undergoes adjustments. In 2025, those adjustments are more than routine—they can affect your access to care and how much you pay for it. Even if you’re satisfied with your current plan, a failure to review the 2025 changes could mean losing valuable benefits—or gaining new ones if you act in time.

Medicare Advantage and Part D plans have introduced several notable changes, and Original Medicare has also updated costs and rules. Here’s what you need to know before deciding whether to keep or change your plan.

The New Out-of-Pocket Prescription Drug Cap

One of the most significant changes in 2025 is the implementation of a $2,000 annual cap on out-of-pocket costs for prescription drugs under Medicare Part D. This cap eliminates the former coverage gap (often called the “donut hole”), offering financial relief to those with high medication expenses.

How This Affects You:

• Once you reach $2,000 in out-of-pocket spending on covered drugs, your plan pays 100% of the remaining costs for the rest of the calendar year.

• This change benefits anyone with consistent or costly prescriptions.

• If your plan doesn’t reflect this cap accurately, you could be overpaying or missing out on additional savings.

Spreading Prescription Costs with the Payment Option

To further support beneficiaries, Medicare has introduced a prescription payment option that allows you to spread drug costs over the year in equal monthly payments.

What to Know:

• Enrollment in this option is not automatic—you must opt in.

• This helps with budgeting, especially if your medication costs spike early in the year.

• Review your plan to confirm if it participates and how to sign up.

Medicare Part B and Part A Cost Adjustments

Cost changes to Medicare Parts A and B in 2025 can also impact your budget:

Medicare Part A (Hospital Insurance):

• Inpatient deductible: $1,676 per benefit period

• Coinsurance for hospital stays: $419/day for days 61–90

• Skilled nursing facility coinsurance: $209.50/day for days 21–100

Medicare Part B (Medical Insurance):

• Monthly premium: $185

• Annual deductible: $257

Make sure your budget reflects these updates. Premiums and deductibles have gone up, and not planning for them could leave you financially exposed.

The Open Enrollment Period Still Matters More Than Ever

From October 15 to December 7, Medicare Open Enrollment gives you the opportunity to compare, switch, or drop your plans. Even if you made changes last year, you should revisit your options again in 2025.

Why?

• Plan networks change.

• Drug formularies (covered medications) may be revised.

• Copayments and coinsurance amounts can increase.

Failing to review your plan during this window could mean:

• Losing access to preferred doctors

• Paying more for medications

• Missing out on new benefits your current plan doesn’t offer

Special Focus on Medicare Advantage in 2025

If you’re enrolled in a Medicare Advantage plan, understand that these plans have varying networks, benefits, and out-of-pocket limits. In 2025:

• The in-network maximum out-of-pocket limit is $9,350

• Combined in-network and out-of-network maximum can reach up to $14,000

Plans might also drop or add hospitals, specialists, or even primary care providers. Always check the provider directory for your 2025 coverage.

Supplemental Benefits May Have Changed

Medicare Advantage plans often offer benefits beyond Original Medicare—such as dental, vision, transportation, and over-the-counter items. In 2025, many plans have scaled back or modified these offerings.

Look Out For:

• Reduced over-the-counter benefits (fewer items or lower allowance)

• Changes in transportation coverage (limited rides or mileage caps)

• Dental coverage caps or network limitations

Compare your plan’s 2025 benefit summary with what was available last year. Not all extra benefits remain the same.

Penalties Still Apply for Late Enrollment

If you delayed enrolling in Medicare Part B or Part D without qualifying coverage, penalties still apply in 2025.

• Part B: The penalty is 10% of the premium for every 12-month period you were eligible but not enrolled.

• Part D: The penalty is calculated based on how long you went without coverage and is added to your monthly premium.

These penalties are lifelong. If you’re enrolling during the General Enrollment Period (January 1 to March 31), you’ll begin coverage July 1—but you may pay more.

Review Your Annual Notice of Change (ANOC)

Each year, your plan mails you an Annual Notice of Change (ANOC). This document outlines:

• Premium changes

• Drug formulary updates

• Changes to provider networks

• Updates to cost-sharing structures

You should receive your ANOC by late September. Read it carefully—it contains everything you need to decide whether to keep your plan or shop for a new one.

Understanding Your Rights to Switch Plans

Beyond the Open Enrollment window, you may qualify for Special Enrollment Periods (SEPs) due to:

• Moving to a new service area

• Losing other coverage

• Getting Medicaid or Extra Help

• Changes in your long-term care status

If you qualify, you can switch plans outside the October 15 to December 7 window. It’s crucial to act quickly because these windows are short—often limited to 2 months.

Medicare and Income-Related Adjustments in 2025

Medicare premiums are subject to Income-Related Monthly Adjustment Amounts (IRMAA). In 2025, the IRMAA thresholds have increased:

• For individuals: $106,000

• For married couples filing jointly: $212,000

If your income exceeds these thresholds, you’ll pay more for Parts B and D. If your income recently dropped due to life events like retirement or death of a spouse, you can request a review using SSA Form SSA-44.

Enrollment Options If You Missed Your Initial Window

If you didn’t enroll when first eligible and don’t qualify for a SEP, your next chance is the General Enrollment Period, running from January 1 to March 31 each year.

• Coverage begins July 1.

• Penalties may apply depending on how long you’ve gone without coverage.

While it’s not ideal, this window can help restore your coverage and prevent further penalties or gaps.

Medicare Advantage Open Enrollment Period

Between January 1 and March 31, if you’re already in a Medicare Advantage plan, you can:

• Switch to a different Medicare Advantage plan

• Return to Original Medicare (and join a Part D plan)

You cannot:

• Switch from Original Medicare to Medicare Advantage

• Join a Part D plan if you’re not returning to Original Medicare

Use this period strategically if your current plan isn’t working for you.

Final Plan Review Before Lock-In

Once the Open Enrollment period ends on December 7, your chosen plan will go into effect January 1 and typically cannot be changed until the following October, unless you qualify for a Special Enrollment Period.

Take the time now—between October and December—to:

• Use Medicare’s Plan Finder tool

• Compare your plan’s 2025 changes to others in your area

• Check that your doctors and drugs are covered

Don’t wait until you need care to find out your plan has changed.

Make Sure Your 2025 Medicare Plan Still Works for You

Your Medicare benefits are too important to ignore during the annual review period. Whether you’re looking to lower your costs, gain more value from your plan, or avoid losing access to care, now is the time to act. Carefully compare your options, ask questions, and take note of new rules and limits.

If you’re unsure about your choices or how these changes affect you, get in touch with a licensed agent listed on this website. They can provide personalized help based on your needs and eligibility.