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3 Ways to Save on Medicare as Premiums Rise
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.
Healthcare costs are rising in 2025. If you’re struggling to pay your medical bills, it may be time to consider making a little extra money on the side. From completing short surveys to doing simple tasks online to just sharing your honest opinion, these are some of our favorite ways to make quick cash.
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
Unfortunately, insurance doesn’t cover everything. These resources can help you manage those unexpected expenses.
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.
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.
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.
Listen, we know it’s tough out there. But there’s no shame in asking for help.
These companies make it easy to help yourself and your bank account.
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:
You’ve done what you can to cut back your spending. You brew coffee at home, you don’t walk into Target and you refuse to order avocado toast. (Can you sense my millennial sarcasm there?)
But no matter how cognizant you are of your spending habits, you’re still stuck with those inescapable monthly bills.
You know which ones we’re talking about: rent, utilities, cell phone bill, insurance, groceries…
Ready to stop paying them? Follow these moves…
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.
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