Medicare Premiums Are Rising in 2025: Here’s How to Save Money

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If you’re on Medicare in 2025, the good news is that your out-of-pocket costs for Part D medications are capped at $2,000 this year – the lowest amount ever. You can also get on a payment plan for your Part D prescriptions if you can’t afford the out-of-pocket costs all at once. 

The bad news is that like most years, there will be premium increases. The worse news is that the Social Security cost-of-living adjustment (COLA) doesn’t keep pace with the premium increases – it doesn’t even really keep pace with inflation in general. 

We have suggestions for how to soften the blow.

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Medicare Costs Are Rising in 2025

The new Part B premium will cost beneficiaries $185.00 a month in 2025, up from $174.70 in 2024. 

Medicare Part B is a foundational part of the federal insurance program, covering doctor visits, outpatient surgeries, medical equipment and more. Nearly 1 in 5 Americans could be impacted by the Medicare increase. In 2024, the nation’s largest federal health care program covered more than 67 million people – both people ages 65 and older and younger people with long-term disabilities. That’s 19.8% of the U.S. population.

The Part B deductible — the cost enrollees pay out of pocket each year before Medicare starts paying its share — is also increasing by $17 in 2025. 

The Part A deductible will be higher, too. Medicare Part A primarily covers hospital stays and skilled nursing facilities.


2025 Medicare Costs at a Glance

Program Cost Up from Increase

Medicare Part B premium

$185.00 a month

$174.70 in 2024

$10.30 per month

Medicare Part B deductible

$257 per year

$240 in 2024

$17 per year

Medicare Part A deductible

$1,676 per year

$1,632 in 2024

$44 per year

Why Are Medicare Costs Going Up in 2025?

Medicare costs go up nearly every year to adjust for inflation and new coverage items. Over the last 25 years, premiums have only gone down twice: Once in 2012 and once in 2023. There have been a few years where costs stayed static, but year-over-year increases are the norm.

The 2012 decrease can be attributed largely to the passage of the ACA (aka Obamacare) in 2010. The law encouraged an overall lowering of health care costs across the industry.

For Medicare recipients, that manifested in lower physician and outpatient costs, which were significant enough for Part B premiums to sink by $15.50. They didn’t reach pre-ACA levels again until 2017.

In 2022, the government was predicting outsized demand for a new Alzheimer’s drug. The projections were so large that Part B premiums went up by a whopping $21.60. The drug was a bit of a let down in terms of performance and demand. Because costs were so much less than the government was expecting, premiums went down by $5.20 in 2023.  Last year, they went up by $9.80, and in 2025 we’ll see a $10.30 increase.

2025 Medicare Changes That Could Save You Money

While premiums and deductibles are going up, there is one other change to Medicare in 2025 that could potentially save you money. Out-of-pocket costs for Part D drugs will be capped at $2,000, which could save you thousands – potentially $6,000 more than last year –- if you’re on the right medications.

While it’s not a new change in 2025, last year the Extra Help program did get a face lift. This subsidized program used to require prorated premiums and deductibles based on your income level. But as of 2024, if you qualify at all, the Extra Help program is completely free. No more Part B premiums or deductibles required. Not even prorated ones.

Medicare Costs And Your Social Security Increase

For the second year in a row, Social Security recipients got some disappointing news. 

The annual cost-of-living adjustment (COLA) is increasing by just 2.5% in 2025. Historically, that’s not…the absolute worst. But when you hold the 2.5% COLA to the increase of 5.9% in Part B premiums, you can see how the math doesn’t add up. And while inflation isn’t as out of control as it was in 2022, it’s currently 2.7% year-over-year. That’s more than the COLA – even before you account for Part B premium hikes. 

Whether the lower out-of-pocket costs for Part D drugs will make up for it depends on your individual financial and medical situation.

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3 Ways to Lower Your Medicare Costs in 2025

While the COLA news is discouraging, there are a few things you can do to lower your Medicare expenses as 2025 rolls on. Let’s take a look at three options:

  • Deduct Medicare premiums if you’re self-employed. If you run your own business in retirement, odds are that you (and your spouse) can deduct Medicare premiums on your tax return. Depending on your financial situation, this strategy could potentially make your health care premiums effectively free.
  • Check your coverage and medical bills. Depending on your plan, you may be limited to certain doctors. Ensure you’re visiting in-network providers before you step into the office, and check for medical billing errors after you leave. They’re surprisingly common when you’re on Medicare, so you’re probably getting billed more than you owe.
  • Request an Income-Related Monthly Adjustment Amount (IRMAA). If your financial situation changes throughout the year, be sure to let the SSA know. If your income goes down because of retirement, loss of a pension, divorce, widowhood or a select number of other circumstances, you can request an IRMAA. If it lowers your income enough, you may qualify for Extra Help – which is an extra big deal as it’s now premium-free for anyone who qualifies.

Pittsburgh-based writer Brynne Conroy is the founder of the Femme Frugality blog and the author of “The Feminist Financial Handbook.”

Rachel Christian is a Certified Educator in Personal Finance and a former senior writer for The Penny Hoarder.