Medicare pays for a bulk of older Americans’ health care costs, but not all. And each year Medicare adjusts key costs that are paid by enrollees.
I want to walk through Medicare out-of-pocket costs for 2025. I sure hope those of you who are not yet 65 pay close attention too. Understanding all the costs Medicare requires enrollees to cover out-of-pocket can be an eye-opener that can motivate you to save up more in your retirement accounts, calibrate your spending, or even consider post-retirement opportunities to earn some income.
Medicare Part B Premium
Most enrollees are required to pay a monthly premium for their Medicare Part B coverage; this is the part of the program that covers all your doctor visits and tests. If you are already enrolled and collecting a Social Security benefit, it is automatically deducted from your Social Security payment each month. (If you are enrolled in Medicare but delaying taking Social Security you will arrange direct bank or credit card payments.)
In 2025 the standard monthly premium is $185, up from $174.70 in 2024.
The monthly premium is per person. There is no spousal coverage with Medicare. The $185 monthly premium applies to people filing an individual tax return with modified gross income below $106,000 and married enrollees whose joint tax returns shows income below $212,000. If your income is above those levels your monthly premium is higher. (Note: if you are enrolled in a Medicare Advantage plan you may receive a partial rebate of this monthly premium charge.)
For those of you enrolled in Original Medicare (not Medicare Advantage), I strongly recommend you also pay for a supplemental Medigap insurance plan. For Original Medicare enrollees, the government only pays 80% of part B costs. A Medigap policy will help cover the 20% of costs you are responsible for.
Medicare Part B Deductible
In 2025, you must pay the first $257 for Part B services before coverage kicks in.
Medicare Part A Deductible
Medicare Part A covers in-hospital costs. There is no premium cost if you worked for at least 10 years (and paid Social Security and Medicare taxes in those years.)
There is a Part A deductible if you are hospitalized. In 2025, the Part A inpatient hospital deductible is $1,676 and covers an enrollee’s out-of-pocket cost for the first 60 days of covered care. Anyone who remains hospitalized after 60 days, and up to 90 days, will then pay a daily co-insurance amount of $419.
Skilled Nursing Home Care
Medicare provides limited coverage for nursing home care, and it only applies to skilled nursing home care. After 20 days at a skilled nursing care facility in 2025, an enrollee is responsible for a daily coinsurance cost of $209.50 for days 21-100. Beyond 100 days Medicare does not provide coverage.
Prescription Drug Costs
If you are enrolled in Original Medicare you need to purchase a separate Part D insurance plan for prescription drug costs. The average monthly premium cost is around $40 in 2025. Most Medicare Advantage plans provide drug coverage as part of the plan.
The good news for everyone is that starting in 2025, your maximum out-of-pocket cost for covered prescription drugs is capped at $2,000.
Maximum Annual Out-of-Pocket Costs
The flexibility to choose your medical caregivers and where you receive care is a prime reason to opt for Original Medicare. But you need to understand that there is no maximum out-of-pocket limit if you are enrolled in Original Medicare. As I explained earlier, you are responsible for 20% of your Part B expenses. To repeat myself: this is why anyone with Original Medicare should also have a robust Medigap policy; it will cover that 20% you are on the hook for.
If you are enrolled in Medicare Advantage, when you need care you will typically run into copays that can add up. The maximum 2025 out-of-pocket cost for Medicare Advantage in-network care is $9,350, and $14,000 for out-of-network care. (As noted above, beginning in 2025 the maximum out-of-pocket for covered prescription drugs is $2,000.)
https://www.suzeorman.com/blog/Heres-How-Much-Medicare-Will-Cost-in-2025
