How Much Does Medicare Cost in 2025?

Medicare offers critical health coverage for older Americans and people with certain disabilities, but many are surprised to learn that Medicare isn’t entirely free. While Part A may come at no cost for most, other parts involve monthly premiums, deductibles, copayments, and out-of-pocket expenses. Understanding these costs is essential for planning your healthcare and retirement budget.

In this guide, we’ll walk you through the real costs of Medicare in 2025—including premiums, deductibles, and extra expenses—so you can prepare and make the best decisions for your situation.

The Four Parts of Medicare and What They Cost

Medicare is divided into four parts, each with different types of coverage and associated costs. Here’s how they break down:

Part A – Hospital Insurance

What it covers: Inpatient hospital stays, skilled nursing facility care, hospice, and some home health services.

Premium:

• Free for most: If you or your spouse worked and paid Medicare taxes for at least 10 years (40 quarters), Part A is premium-free.

• If you haven’t met the work requirement:

  • 30–39 quarters: $278/month

  • Fewer than 30 quarters: $505/month

Deductible: $1,632 per benefit period in 2025.

Other costs:

• Days 1–60 in the hospital: $0

• Days 61–90: $408/day

• Days 91 and beyond: $816/day for up to 60 lifetime reserve days

Part B – Medical Insurance

What it covers: Doctor visits, outpatient services, lab work, preventive care, and durable medical equipment.

Premium:

• Standard premium in 2025: $185/month

• Higher earners pay more: Based on your modified adjusted gross income (MAGI), you may pay an Income-Related Monthly Adjustment Amount (IRMAA).
  For example:

  • Individuals earning $103,000+ or couples earning $206,000+ will pay more.

Deductible: $270 per year.

Coinsurance: After meeting the deductible, you generally pay 20% of Medicare-approved services.

Part C – Medicare Advantage

What it covers: An alternative to Original Medicare, these plans include Part A and B coverage and often Part D (drug coverage) plus extra benefits like dental, vision, and hearing.

Premium:

• Varies by plan and provider

• Some plans have $0 monthly premiums, but you must still pay your Part B premium

Other costs:

• Deductibles, copays, and coinsurance vary

• Annual out-of-pocket limits are set by the plan (can range from $4,000 to $8,850 in 2025)

Important note: You can only enroll in Medicare Advantage during specific enrollment periods.

Part D – Prescription Drug Coverage

What it covers: Prescription medications.

Premium:

• Varies by plan, with national average around $33/month in 2025

• Higher earners pay an IRMAA (similar to Part B)

Deductible: Up to $590 in 2025 (varies by plan)

Out-of-pocket cap: In 2025, total drug costs are capped at $2,000 annually due to changes from the Inflation Reduction Act—this is great news for retirees who need regular prescriptions.

Additional Costs and Considerations

Medigap (Medicare Supplement Insurance)

Original Medicare (Parts A and B) doesn’t cover everything. To help with out-of-pocket expenses, many people buy Medigap plans. These are private insurance policies that cover costs like deductibles, copays, and coinsurance.

Cost:

• Varies by plan and location, but typically ranges from $100–$300/month

Important: You can’t have both a Medigap plan and a Medicare Advantage plan at the same time.

Late Enrollment Penalties

If you don’t sign up for Medicare when you’re first eligible and don’t qualify for a Special Enrollment Period, you could face lifelong penalties.

• Part B penalty: 10% for every 12-month period you delayed, added to your monthly premium.

• Part D penalty: 1% of the national base premium for each month you delayed without creditable drug coverage.

These penalties can add up quickly and stay with you as long as you have Medicare.

Managing Your Medicare Costs

Here are a few ways to keep your Medicare costs manageable:

1. Compare plans every year. During the Annual Enrollment Period (Oct. 15 – Dec. 7), review your Medicare Advantage or Part D plan to ensure it’s still a good fit.

2. Apply for Extra Help. This federal program helps cover Part D costs for people with limited income and resources.

3. Check for state programs. Medicaid, Medicare Savings Programs, and State Pharmaceutical Assistance Programs (SPAPs) can reduce your overall expenses.

4. Use preventive services. Medicare covers many screenings and wellness visits at no cost, which can help you avoid bigger bills down the line.

Final Thoughts

Medicare provides essential healthcare coverage, but it’s not a one-size-fits-all solution—and it’s not free. While many people are eligible for premium-free Part A, other parts of Medicare come with monthly premiums, deductibles, and cost-sharing requirements that can significantly affect your budget.

Understanding the full range of Medicare costs is the first step toward choosing a plan that works for your health needs and financial situation. Whether you’re nearing retirement or helping a loved one navigate the system, being informed today can save you money—and stress—tomorrow.