Blog

The amount of income a beneficiary makes can affect the amount of their Medicare Part B & Part D premiums. Individuals with higher-than-average incomes pay more for Part B and D benefits. Due to the fact that most beneficiaries do not pay for Part A, no IRMAA applies even when a beneficiary pays for the Part A benefit. The U.S. Social Security Administration decides the new income threshold amounts each year. In this post, we explain the Medicare Part B IRMAA 2025.

IRMAA

The term IRMAA stands for income-related monthly adjustment amount. IRMAA is a fee beneficiaries pay on top of Medicare Part B & Part D premiums when they have income over the annual threshold amounts. In 2025, Medicare beneficiaries earning more than $106,000 annually will pay the IRMAA. This amount is added to their Part B and Part D premiums.

The SSA put the Part B IRMAA in place in 2007. The Part D IRMAA did not go into effect until 2011.

How beneficiaries pay the Medicare Part B IRMAA

When a Medicare beneficiary receives their Social Security retirement benefit, the Part B premium is deducted from their monthly check. This includes any IRMAA surcharge amounts. The IRMAA is calculated using a sliding scale based on income brackets. Each year IRMAA amounts change due to inflation.

There is a hold harmless provision that prevents Social Security payments from decreasing from one year to the next. However, this rule does not apply to beneficiaries who pay an IRMAA.

In 2025, most monthly Social Security benefits will increase by about $50 a month. In addition, the Part B premium will most likely increase to $185. This amounts to an increase of about $10 per month. This keeps the hold harmless from going into effect in most cases.

Who pays the IRMAA

The average person will never pay an IRMAA. Only about 7% of those who receive Social Security benefits will pay an IRMAA. There are currently almost 67 million people who receive Social Security benefits and about 4.9 million beneficiaries pay the IRMAA.

How income determines the IRMAA

Tax returns from two years prior determines the beneficiaries’ IRMAA. In other words, the beneficiaries’ tax return from 2023 will determine their IRMAA surcharge for 2025. The amount of an individual’s IRMAA is recalculated each year. For 2025, individuals with an income over $106,000 will pay an IRMAA.

If the Social Security administration determines a beneficiary has an IRMAA, they receive a notice to inform them of the surcharge. Please refer to the chart below for all income levels and IRMAA amounts.

How to appeal an IRMAA

If a beneficiary receives an IRMAA determination, they can appeal the determination. Those who have a significant loss of income from a life changing event can file for a redetermination. To file for a redetermination, beneficiaries need to fill out Form SSA-44. A few life-changing events may include a divorce, death of a spouse of loss of income due to retirement or other reason.

Click here to watch a YouTube video on Part B IRMAAs

Don’t forget to subscribe to our YouTube channel and view all our free training videos!

If the SSA denies the appeal, OMHA (the Office of Medicare Hearings and Appeals) conducts a third level appeal process.

Medicare Advantage plans, also known as Medicare Part C, are popular choices for seniors who want Additional benefits not offered by Original Medicare. However, choosing the right plan means understanding the enrollment periods, each of which has specific rules and dates. Here’s a breakdown of the Medicare Advantage enrollment periods and who is eligible to use them.

IEP (Initial Enrollment Period)

The Initial Enrollment Period is the first opportunity for beneficiaries to enroll in a Medicare Advantage plan. The IEP is a seven-month period is when beneficiaries first become eligible for Medicare, which generally happens when they turn 65. It includes:

1. The three months before their 65th birthday month
2. Their birthday month
3. The three months that follow their birthday month

During this time, they can enroll in Medicare Parts A and B and a Once both are in place, they may decide to enroll in a Medicare Advantage plan. This period is very important to ensure beneficiaries enroll in coverage that includes Part D (prescription drug) coverage to avoid facing potential penalties. One way to avoid this is to include an MAPD (Medicare Advantage Prescription Drug Plan).

AEP (Annual Enrollment Period)

The Annual Enrollment Period, often called the Open Enrollment Period, runs from October 15 to December 7 each year. During AEP, Medicare plan enrollees can make changes to their Medicare Advantage, prescription drug plans, or Medicare Supplement plans including:

1. Switching from Original Medicare to a Medicare Advantage plan
2. Changing from one Medicare Advantage plan to another
3. Moving from a Medicare Advantage plan back to Original Medicare
4. Changing from one Prescription plan to another

This period allows enrollees to review and adjust healthcare coverage based on current health needs and changes to the following year’s Medicare plan options.

MA-OEP (Medicare Advantage Open Enrollment Period)

The Medicare Advantage Open Enrollment Period takes place annually from January 1 to March 31. However, this period is only available to individuals who are already enrolled in a Medicare Advantage plan. This period It allows for limited changes, including:

• Switching to a different Medicare Advantage plan
• Dropping a Medicare Advantage plan and returning to Original Medicare (with the option to add a Part D prescription drug plan)

Please note; during the MA-OEP, enrollees can only make one change and cannot switch from Original Medicare to a Medicare Advantage plan. This period is a great way to change plan choices for those who discover their current Medicare Advantage plan doesn’t meet their coverage needs.

SEPs (Special Enrollment Periods)

Special Enrollment Periods are triggered by specific life events, these events provide an opportunity to make changes outside the regular enrollment periods. Common scenarios that qualify for SEPs include:

1. Moving: Enrollees who move to a new address outside their plan’s service area, can switch to a plan in the new service area
2. Loss of employer coverage: Those who lose employer-based health coverage qualify for an SEP
3. Qualifying for financial assistance: Enrollees who qualify for some financial assistance programs such as Medicaid or Part D Extra Help, may be eligible for an enrollment period
4. Moving in or out of a nursing home
5. Enrollees whose plan goes out of business
6. Weather or disaster related emergencies that cause enrollees to miss a valid enrollment period

These SEPs allow enrollees to adjust their Medicare Advantage coverage to meet their needs. This ensures beneficiaries are not left without the necessary coverage.

Five-Star SEP

All Medicare Advantage and PDP plans are rated on a scale of one to five stars, with five stars representing the highest quality. Beneficiaries can switch to a five-star Medicare Advantage plan if there is one is available in their area. They can do this even when they are outside a normal enrollment period. Enrollees can use this opportunity only once per year, from December 8 through November 30.

This SEP encourages beneficiaries to look for the highest rated plans. This encourages plan providers to provide higher levels of service and benefits.

Click here to download medicare.gov understanding Medicare Advantage Plans booklet

How to make the most of the Medicare Advantage enrollment periods

1. Review coverage annually: Health needs and plan costs change year-to-year, so it’s beneficial to reassess coverage options every AEP.
2. Consider budget and health needs: Look closely at premiums, out-of-pocket costs, the provider network and medication coverage (if appropriate) when evaluating plans.
3. Use SEP opportunities wisely: Major life changes can unlock SEP opportunities. Be sure to act within the timeframe allotted when these events occur.
4. Compare plan ratings: Medicare’s plan rating system provide insight into quality and satisfaction levels of available plans. Switching to 5-star plan can give enrollees peace of mind.

Navigating Medicare Advantage enrollment periods may seem overwhelming, but understanding these opportunities can help ensure that enrollees are in the best possible plan for their healthcare needs.

If you are a Medicare agent looking to join the team at Crowe, click here for online contracting

Learn what Crowe has to offer agents – watch a quick video

Click here for online contract and join the team at Crowe

IRMAA Brackets 2025

Agents need to understand the Medicare IRMAA brackets 2025 this can have an impact on their clients’ budget for next year. It can affect their Medicare Part B costs as well as their Part D costs.

What is an IRMAA

IRMAA is an additional charge added to both Medicare Part B and Medicare Part D premiums.  An IRMAA applies to beneficiaries who have an income level above a specific annual pre-determined amount.  Income amounts are decided on a sliding scale each year and consist of 5 income brackets.   When the Social Security administration determines a beneficiary must pay an IRMAA, they send a notice of the additional premium as well as an explanation.

The IRMAA is decided using the income from 2 years prior.  In other words: IRMAA amounts in 2025 are based on 2023 income. 

The Determination of Part B and Part D premiums are calculated by adding the current Part B or Part D premium to amount of the IRMAA. 

Part B & Part D IRMAA income brackets & surcharge amounts 2025

Please note:  The IRMAA for married Medicare beneficiaries who file separate tax returns are higher if they lived together for any amount of the year.

Paying the IRMAA

Because Part B and Part D are 2 separate IRMAAs, beneficiaries make the payments n different ways. The CMS automatically adds the Part B IRMAA to the monthly premium bill. Beneficiaries pay the Part D IRMAA directly to Medicare.

IRMAA for Part B

Here are a few ways to pay your Part B IRMAA

1. Send your payment to Medicare through the mail. You can send either a check, money order or credit or debit card information by filling out the coupon attached to the bottom of your bill. If you are sending payment without the coupon, be sure to put your Medicare number in the memo of the check.  Send payments in the return envelope that comes with your invoice and mail payments to Medicare Premium Collection Center, P.O. Box 790355, St Louis , MO 63179-0355.
2. The quickest way to pay is online with your secure Medicare account.  You can use a credit or debit card or pay through either your checking or savings account.
3. Use Medicare Easy Pay to have Medicare deduct your premiums from your savings or checking directly each month.  Please note; it can take up to 8 weeks for automatic deductions to begin.  Be sure you pay the premiums another way until it is set up.  You can also use your bank’s online bill payment service if they offer one.

Part D IRMAA

On the other hand, you must pay the IRMAA for Part D directly to Medicare.  The beneficiary must pay it even if their employer or a third party (e.g., retirement system) pays their Part D premiums. They receive a monthly bill from Medicare for the Part D IRMAA.  This amount can be paid using the same method used to pay for their Part B premium.

Usually, beneficiaries receive the bill the same month it is due.  The premiums are always due on the 25th of each month. In the event that you miss a payment, or send it in late, it is included with the next bill.

How to request a redetermination

The SSA (Social Security Administration) bases their determination of who owes an IRMAA on the income reported on tax returns from the  2 years before you pay the IRMAA.  If SSA does decide you owe an IRMAA, they send you an initial determination notice.  When you receive this notice, you will also get information explaining how to request a new initial determination.

If Social Security receives a new initial determination, they may revise the amount owed or take the IRMAA away all together.  To request the redetermination, either schedule an appointment with your local Social Security office or submit the following form:

Medicare IRMAA Life-Change Event form

You need to provide documentation of your correct income or of the life-changing event that has affected your income level in a negative way.

Here are examples of acceptable life-changing events:

1. Death of a spouse, a divorce or annulment or a marriage
2. If either spouse stops or reduces the number of hours they work
3. When either spouse loses a pension
4. Loss of income due to income producing property loss because of a natural disaster, fraud or similar circumstances

Click here to download an IRMAA appeal form

If you had an amended tax return, you can call the representatives at SSA +1 800-772-1213 and say you want to lower your (IRMAA) Medicare Income-Related Monthly Adjustment Amount.   Use the fact that Social Security used outdated or incorrect information when calculating your IRMAA.

Medicare’s one to one consent rules have become increasingly more complex in recent years. Both the Centers for Medicare & Medicaid Services (CMS) and the Federal Communications Commission (FCC) have imposed rules to safeguard consumers.

One-to-One Consent

One-to-one consent refers to requirements that each individual must provide consent for specific interactions, particularly with regard to healthcare and telecommunication interactions.

At its core, “one-to-one consent” means each individual interaction requires separate and specific consent. This applies to businesses that gather, use, or share personal information, which includes sensitive data related to healthcare or communication preferences. For organizations subject to CMS and FCC rules, failure to obtain the correct form of consent can lead to penalties, litigation, or loss of trust with clients and consumers.

For CMS, consent standards often pertain to healthcare communications. CMS oversees programs like Medicare and Medicaid, its regulations ensure that beneficiaries’ personal health information is protected and that there is explicit consent before using or sharing it.

The FCC and consent

In general, the FCC regulations focus on telecommunications and includes phone calls, texts and email communications. The FCC requires individuals to give permission before a company can contact them for marketing purposes.

The FCC’s regulation on consent comes from the Telephone Consumer Protection Act (TCPA), is in place to prevent unsolicited robocalls, telemarketing, and other unwanted communications. The TCPA mandates that individuals must provide prior express consent before businesses or organizations contact them via certain channels, including:

Telemarketing calls require written consent if they’re automated or involve a pre-recorded message. For non-telemarketing calls, prior express consent is sufficient, but it must be clear and documented.

Text Messaging follows the same standards as calls; organizations need explicit consent to send promotional or transactional messages.

Learn how to manage your book of business

The TCPA incorporates the Do-Not-Call registry requirements and allows individuals to opt-out of telemarketing calls.

The TCPA allows consumers to revoke consent at any time. It must be easy for the consumer to opt out and honored immediately by the organization. Non-compliance can result in fines or lawsuits. The increased use of automated dialing systems makes it more important for businesses to ensure they follow the regulations closely.

The CMS and consent

Due to concerns about patient privacy and data security, CMS consent requirements are even more strict. In particular, the Health Insurance Portability and Accountability Act (HIPAA) plays a significant role in setting the privacy standards enforced by CMS. HIPAA requires protected health information (PHI) be treated with a high level of confidentiality, and patients give specific consent for each use or disclosure of their PHI.

Any provider, organization or individual under CMS jurisdiction must have documented consent for communications to share personal information with third parties, except under certain treatment or operational exceptions.

Anyone using digital communication (emails, texts, or calls) must obtain explicit consent to do so.

Individuals must have the right to withdraw (opt out) their consent to communications. CMS requires those who contact potential clients to clearly explain how to revoke consent, usually through a simple opt-out option or written request.

Additionally, CMS enforces the need for clear explanations regarding what individuals are consenting to. This ensures no information is hidden in fine print or hard-to-understand language.

How FCC and CMS regulations differ

FCC Regulations primarily focus on consumer privacy in communication channels for marketing or solicitation purposes. The purpose is to avoid unwelcome communications and provide consumers control over who can contact them. The new FCC rules go into effect as of January 27, 2025.

CMS Regulations focus more on healthcare privacy, ensuring that information remains private and that individuals are fully aware of and agree to any sharing of their data.

Impact on Businesses and Consumers

One-to-one consent regulations are essential for both protecting consumers and clarifying business obligations. This empowers Individuals to make informed decisions about their private data. For telecommunication, consumers benefit from reduced unsolicited marketing and better control over their contact preferences.

For businesses, these regulations require meticulous record-keeping, clear communication protocols, and potentially, investment in new technology to capture, document, and manage consent. Companies that fail to comply face financial penalties and potential legal action, but more importantly, they risk damaging their relationship with consumers.

How this effects agents

After October 1, 2024, agents who make outbound calls can only contact leads that need provide a CMS-compliant One-to-One consent.

Lead companies that supply inbound warm transfers must have written consent from the consumer. They can also get a real-time one-time verbal consent to transfer the call to another TPMO. Please note: the verbal consent must be recorded clearly state the TPMO’s name. A generic permission to transfer is not acceptable.

Learn how to choose the right type of lead

The CMS rule restricts sharing consumer information with affiliates or other entities without prior written consent from the consumer.

What about inbound calls

This rule does not apply to direct inbound calls.

Agents who use Medicare leads

Agents using Medicare leads must be sure their lead company has recorded written consent specifically in your name for the warm transfer.

Click here to watch a YouTube video for strategies to handle the 2025 AEP

To add a carrier to your existing Crowe contract or to join the Crowe team – Click here

Understanding how to close a Medicare sale is essential. There are millions of people enrolling in Medicare every year. Agents who master the art of closing can build a large book of business while helping clients find the best coverage for their unique needs. We will provide a few ideas to help increase your chances of closing a Medicare sale.

Build Trust and a good rapport

Trust is essential in Medicare sales. Clients are trying to navigate complex health insurance options and avoid costly mistakes. They may feel overwhelmed or frustrated. Keep this in mind when you speak with a client. Here are some ways to help set your client at ease:

The most important thing you can do is listen actively. Provide clients an opportunity to express their concerns, preferences, and questions. This shows them that you understand their needs and wants and that you will try to find what the best plan for them.

Because Medicare choices are complicated, it is important to be transparent with clients. Break down the plan options and prepare to discuss the pros and cons of each one.

Stay educated on Medicare plan choices and regulations. Both of these things change every year. Understanding what is going on will help clients feel confident that they can trust that you are knowledgeable and capable. This will help put them at ease.

Understand the client’s needs

Keep in mind, every client has unique budget concerns and healthcare needs. it’s essential to understand each client’s personal situation completely before making any recommendations.

Asking questions about the client’s specific medications and providers is extremely important. Agents must make sure both doctors and medications are covered under each plan. How much can they afford to spend on out-of-pocket costs? Does your client have a low income where they may qualify for specific plans that offer additional benefits? You need to learn which benefits are most important to each client?

By listening to their answers, you can provide options that meet their needs. This helps narrow down the options and find a plan that they are happy with.

Be able to explain the parts of Medicare

Because Medicare has several parts, each with its own coverage and rules, you must understand each part and explain how they work so clients know what they are choosing. Providing a brief summary of each part will give clients a good understanding without overwhelming them.

Overcome Objections

Objections are a natural part of the sales process. Beneficiaries may have concerns about cost, network restrictions, or unfamiliarity with Medicare’s options. That is why agents need to be prepared to handle objections.

If the client is worried about costs, it is important to express empathy and find some affordable options or look for ways they can save on costs. You may need to help them apply for Extra Help or Medicare Savings Programs.

You will need to provide examples of how each option can work for them in specific situations. In many cases, you will need to do some calculations to help them decide which plan comes out better for their budget.

If they use several providers, look for plans that have a larger network and avoid network restrictions. When you have clients who travel, find a plan that gives them coverage wherever they go. Again, the answer to all these questions comes down to listening to the client.

Click here to learn the differences between PPOs and HMOs

Next Steps

Uncertainty causes clients to hesitate. Be sure you answer all their questions as best you can. The next thing you need to explain is the enrollment process. It will help to walk the potential client through the process.

The first step of enrollment is eligibility. It may help to explain Medicare enrollment periods, such as the Initial Enrollment Period (IEP) and Special Enrollment Periods (SEPs). This can ensure they understand when they should apply.

Next, explain what documents they will need and where they can apply. You may provide a paper application, a link to a carrier site or even a phone number. It all depends on the plan, the carrier and the tools you have available.

Watch our YouTube video on updates to Sunfire and Connecture quoting and enrollment tools

Make sure clients know that you are there if they have questions or concerns if any issues some up. You should let them know you will contact them regularly to check in and provide them with your contact information if they want to get in touch with you.

Closing Technique

Once you’ve addressed all questions and provided the necessary information, it’s time to close the sale and write the application. Here are a few closing techniques that can help with Medicare sales:

Assumptive Close: “This plan seems to be a good fit for your health needs, shall we go ahead and start the enrollment?

Choice Close: “Between the two plans we discussed, which do you feel is the best fit for you?”

Summary Close: “Just to recap, all your doctors participate with this plan it covers your prescriptions and also has a lower premium. Would you like to go ahead and enroll?”

These approaches to closing encourage commitment without pressuring the client. This encourages them to feel comfortable and confident in their decision.

Follow-Up

Following up after the sale is just as important as the initial sales process. Agents should contact the client to let them know their plan is approved. They also need to contact them to see how the plan is working for them. Making sure they are happy with their choice goes a long way to let them know you care about their satisfaction and are not there only for the sale. Let them know you’re available if any issues arise. A simple follow-up builds trust and can lead to referrals or renewal business. Both are invaluable in this industry.

Learn what Crowe has to offer agents – watch a quick video

Click here for online contracting

Closing a Medicare sale isn’t about hard selling; it’s about understanding your client’s needs, educating them on their options, and guiding them toward a solution that will benefit them most. We as agents are here to provide a service. Clients need Medicare coverage it is just a matter of sorting out the plan that best suits their needs. Helping clients make an educated choice is our goal.

By building rapport, being transparent, and confidently addressing any objections, you can create a closing experience that makes clients feel secure in their choice.

The 2025 prescription payment plan is available to Medicare Part D beneficiaries. It lets them pay high out-of-pocket prescription costs over the course of months instead of all at once. The other name for The prescription payment plan is Smoothing. The payment plan is part of an effort to make prescription drugs more affordable for Medicare beneficiaries.

How the prescription payment plan works

Any Part D plan enrollee can participate in the prescription payment plan as long as they have high-cost prescriptions that are on their plan’s formulary. Beneficiaries have the chance to divide their out-of-pocket prescription costs into manageable monthly payments.

Eligible beneficiaries can contact their Part D insurance provider to opt into the program. The plan provider will calculate the payments to spread out evenly over the course of the year. The beneficiary can contact their insurance Part D provider if they need to add prescriptions to their current arrangement and have it adjusted.

Enrollees do not pay a cost to participate in the payment plan. Beneficiaries do not pay interest or penalties on their medication costs.

How to join the prescription payment plan

It should be fairly simple to enroll in the plan. In some instances, the Part D plan provider may contact beneficiaries who are known to have high-cost prescriptions. Beneficiaries who are interested in the plan should contact their plan provider for instructions to opt in.

Why enroll in the plan

There are many reasons to enroll in this program. Enrollment may help beneficiaries manage their budget by spreading out their prescription costs. This is a great way to avoid a large bill at the pharmacy.

Knowing there is an alternative to a large bill, may help ensure beneficiaries fill their necessary prescriptions without having to face financial stress. In some cases, beneficiaries have had to go without needed medications due to budget concerns. This help eliminate that issue. The plan also provides peace of mind with the safety of predictable monthly costs.

Click here to learn about the $2,000 annual cap on Out-of-Pocket prescription costs

Watch a YouTube video on the drug cap for 2025

Each year, Medicare makes changes to the plans beneficiaries are offered. This is why both agents and beneficiaries need to stay up to date on all changes that place. Knowing all the choices available helps beneficiaries receive the coverage they need and plan for their year ahead. A licensed insurance agent can provide advice to ensure beneficiaries choose a plan that suite their needs and budget.

If you are a Medicare agent looking for an upline, click here for Crowe online contract

Many Medicare enrollees are wondering what the costs for Medicare Part B 2025 will be. Medicare Part B is a critical part of healthcare coverage for Medicare beneficiaries. It covers outpatient services, preventive care, doctor visits, and durable medical equipment. Knowing the expected premiums and deductible amounts can help beneficiaries plan their healthcare budgets effectively.

Medicare Part B Premiums in 2025

The Medicare Part B premium is the monthly amount that beneficiaries pay for medical coverage. In recent years, premium costs have steadily increased due to rising healthcare expenses, which include the cost of outpatient services and medical advancements.

For 2025, the CMS (Centers for Medicare and Medicaid Services) has projected an increase in the standard monthly premium for Medicare Part B to $185. This is up from $174.70 in 2024.

Please note; individuals who have an income over the specified threshold will pay an IRMAA and therefore the cost of their Part B coverage will be higher. For 2024, the high-income threshold was 103,000 for an individual and $206,000 for a couple. For 2025, it increases to $106,000 for an individual and $212,000 for couples.

Individuals who enroll in Part B coverage late may pay a penalty and therefore their monthly premiums are also higher.

Medicare Part B Deductible in 2025

In addition to the monthly premium, Medicare Part B enrollees must meet an annual deductible before Medicare starts covering most of the costs. For 2024, the Part B deductible was $240. For 2025 the deductible is predicted to be about $257.

Once the deductible is met, Medicare generally covers 80% of the Medicare approved costs leaving the beneficiary responsible for the remaining 20%. Factoring in the deductible as well as anticipated co-payments help with healthcare budgets.

Planning for Higher Costs

With the cost increases in 2025, there are a few ways beneficiaries can prepare:

Beneficiaries with a low income and limited assets may be able to apply for MSP. MSP may pay for Medicare Part B for those who qualify.

Those who are near the income threshold for IRMAA adjustments, consider strategies to manage your taxable income to potentially reduce your premium amount.

Consider a Medicare Advantage (Part C). These plans bundle Parts A and B and often Part D. They may also include additional benefits, like vision, dental, hearing and more. They sometimes offer lower out-of-pocket costs compared to traditional Medicare.

Look into a Medigap plan (Medicare Supplement). Medigap/supplemental policies help cover costs not paid by Medicare, such as co-pays and deductibles, which can help offset increases in Part B costs.

Navigating Medicare Costs

Medicare costs can be complicated, and even a small increase can have a significant impact on a fixed income. Resources like licensed Medicare agents and the State Health Insurance Assistance Program (SHIP) offer free advice for Medicare beneficiaries. This helps them understand their options and make the best possible choices.

Are you a licensed Medicare agent; join our team at Crowe – click here for online contract

Agents – Click here to watch a YouTube video of updates to Connecture and Sunfire for 2025

Knowing what to expect in terms of Medicare Part B costs helps enrollees make informed decisions about healthcare coverage.

Understanding Medicare Part D Costs in 2025

Medicare Part D, the part of Medicare that covers prescription drugs for millions of Americans, provides significant savings but comes with costs that beneficiaries need to plan for. Each year, adjustments are made to premiums, deductibles, and other costs associated with Part D. There will be some significant changes to the Medicare Part D costs 2025. We will discuss the Part D costs, what changes to expect, and tips to manage these expenses.

Watch a YouTube video on the Part D drug cap

Key Cost Components of Medicare Part D

Medicare Part D plans are offered by private insurance companies. Each plan has varying costs depending on the specific plan chosen. In 2025, the cost structure will include four main components:

Monthly Premiums

Medicare Part D premiums vary significantly, depending on plan and location. The average monthly premium for 2025 is around $40. Keep in mind, premiums for individual plans may be as high as $150 or as low as $0. Additionally, some beneficiaries qualify for the Medicare Extra Help program, which can help reduce premiums and other Part D costs.

Annual Deductible

In 2025, Medicare Part D’s standard annual deductible is capped at $590, though not all plans charge the maximum deductible. In general, plans use tiered pricing, meaning they might charge no deductible for lower-tiered drugs.

Initial Coverage Phase

Once the enrollee meets the deductible, they enter the initial coverage phase. During this phase, enrollees are responsible for a copayment or coinsurance for each prescription. In 2025, the initial coverage limit will be set at $2,000. This means that once the amount spent by the plan and the beneficiary reaches this threshold, enrollees transition to the catastrophic phase.

Catastrophic Coverage

In past years, after reaching the coverage gap or donut hole, beneficiaries would enter the catastrophic phase, with Medicare covering the bulk of prescription costs. A major shift in 2025 is the elimination of coverage gap/donut hole phase, meaning enrollees won’t have to pay coinsurance or copayments after reaching the catastrophic coverage limit of $2,000 in true out-of-pocket costs. This limit provides significant relief, especially for those needing high-cost medications.

Changes and Reforms Affecting Part D Costs in 2025

The Inflation Reduction Act (IRA) of 2022 brought changes to Medicare Part D in an effort to improve cost predictability and help enrollees manage high prescription drug expenses. Here’s a breakdown of the key IRA-related reforms that apply in 2025:

$2,000 Annual Out-of-Pocket Cap
Starting in 2025, Medicare Part D beneficiaries will have an out-of-pocket cap of $2,000 per year on prescription drugs. This landmark change helps beneficiaries with high drug costs avoid excessive spending and will particularly benefit those with high-cost prescriptions as long as they are on their plan’s formulary.

Monthly Payment Options
Medicare will introduce a “smoothing” option for beneficiaries with high prescription costs. This allows enrollees to spread out payments over the course of the year, rather than facing steep costs in any one month.

Managing Medicare Part D Costs in 2025

Compare Plans Carefully

Each Part D plan varies in terms of premiums, deductibles, and formulary (the list of covered drugs). Enrollees should review all available options carefully each year during the Medicare AEP (October 15 – December 7). A licensed Medicare agent can help to ensure beneficiaries choose a plan that best meets their needs and budget.

Use preferred pharmacies

Most Medicare Part D plans have preferred pharmacy networks where beneficiaries can get lower costs. Using these pharmacies can reduce copayments and coinsurance expenses. If enrollees use an out of network pharmacy, prescription drugs will usually cost more.

Ask your provider about lower-cost options

In some cases, when a beneficiary has a high-cost medication that is not on their plan’s formulary, they may want to ask their healthcare provider if there are generic or alternative medication that may be more affordable. Sometimes, a small change in medication can lead to considerable savings. If there is no generic available, their provider may need to ask for a formulary exception. When this is the case, the PDP plan provider agrees to pay for a non-formulary medication.

Evaluate Extra Help Options or patient assistance programs

Those who have a limited income and resources, may qualify for Medicare’s Extra Help program, which can help cover premiums, deductibles, and copayments. This program offers significant savings and could reduce costs drastically.
Additionally, many pharmaceutical companies offer assistance programs that provide discounts on high-cost drugs. Checking for available assistance can be a good strategy, especially for high-cost or specialty medications.

Preparing for 2025 and Beyond

The changes coming to Medicare Part D in 2025 are a step towards making prescription drugs more affordable for Medicare beneficiaries. The introduction of an annual out-of-pocket cap and the smoothing program can help provide Medicare enrollees better predictability of their prescription drug costs.

Anyone who relies on Medicare Part D, should review plan details and explore resources to manage these costs effectively. By understanding the structure of Part D and the recent changes, beneficiaries can maximize savings and access their medications without breaking the bank.

Each year CMS provides the costs for Medicare. the 2025 Medicare costs include some expected adjustments to premiums, deductibles, and out-of-pocket expenses. This year the changes are based on inflation, healthcare demand, and legislative impacts. Below, we go over the anticipated cost structure, reasons behind the adjustments, and what it means for beneficiaries.

Hospital Insurance – Medicare Part A

Premium

Itis important to note; most people qualify for premium-free Part A due to their work history. However, those who do not qualify will pay an estimated $281 monthly for those with at least 30 quarters of work history, and $510 monthly for those with less than 30 quarters of work history.

Deductible

The Part A deductible is projected to increase to approximately $1,684. The Part A deductible is the cost a beneficiary pays if admitted into either the hospital or a skilled nursing facility.

Coinsurance Costs

Medicare Part A also has daily coinsurance for longer hospital stays. For 2025, beneficiaries can expect coinsurance rates for extended stays to go up to about $421 per day. This reflects the overall rate of inflation in hospital service costs.

Medical Insurance – Medicare Part B

Standard Premiums:

The Part B standard premium, in 2024 is $174.70. This amount will increase to about $185 per month. This increase primarily reflects higher outpatient and physician service costs.

Income-Related Adjustments:

Beneficiaries with higher incomes pay an Income-Related Monthly Adjustment Amount (IRMAA), which will also see a slight increase. These adjustments are based on yearly income, with the highest earners potentially paying over $600 per month in premiums.

Deductible:

The Part B deductible is expected to rise to about $257. Once the beneficiary meets the annual deductible, Medicare usually covers 80% of Medicare approved Part B services. The beneficiary is responsible for the remaining 20%.

Medicare Advantage Plans – Medicare Part C

Medicare Advantage plans (Part C) offer an alternative to original Medicare and include Part A, Part B, and in most cases, Part D (prescription drug) coverage. Private insurance companies offer these plans, and the pricing varies from $0 and go up from there.

Medicare Advantage plan, costs vary based on the plan and insurer, enrollees will also see some increases in premiums and out-of-pocket maximums. CMS caps out-of-pocket maximums. In 2025, they are expected to reach roughly $8,500. This could mean higher costs for enrollees with extensive health needs. There are many plans that will reduce extra benefits such as OTC, vision and dental to name a few.

Prescription Drug Plans – Medicare Part D

Premiums

Part D premiums for standalone prescription drug plans have an average cost of about $40, although this amount varies from $0 up to $150 per month. Overall, there are fewer plan choices available for 2025. Some plans have left the market, and some plans have consolidated their options. The actual plan cost depends on the specific plan and region.

Watch a quick YouTube video on the $2,000 drug cap

Deductibles and Coverage Gap

The maximum allowable deductible for Part D has increased to $590 for 2025. Additionally, the “donut hole” or coverage gap, where beneficiaries pay a greater share of drug costs, has been removed for 2025. Additionally, out-of-pocket drug costs are capped at $2,000. This may significantly reduce expenses for high-cost medications as long as they are on the plan’s formulary.

Why costs are increasing

Medicare cost adjustments reflect a variety of economic and healthcare factors:

Rising Healthcare Costs

Inflation in healthcare affects everything from hospital services to drug prices, driving up Medicare costs.

An Aging Population

As more people enroll in Medicare, especially those with high health needs, the overall program costs increase.

Legislative Changes

Recent legislation, such as the Inflation Reduction Act, introduced caps on Part D costs, in an attempt to reduce prescription drug expenses for seniors. This is causing many changes in the industry while insurance carriers figure out how to pay the billions of dollars this program will cost them. Unfortunately, insurance agents will lose commission on many plans and various plan costs will go up for many enrollees to make up for these changes.

What Can Beneficiaries Do

Use the help of a licensed Medicare agent to compare coverage options each year. A licensed agent can help find the coverage you want as well as a cost that is within your budget. Comparing plans each year is crucial as benefits and plan formularies change each year.

The Medicare cost increases for 2025 underscore the need for beneficiaries to review their coverage options and consider their healthcare needs. Beneficiaries should take advantage of Medicare’s annual open enrollment period to reassess and choose the best coverage.

Be sure to look into financial assistance programs such as MSP and Extra Help. These programs can make a huge difference with Part B and D costs.

Just like the other Medicare coverage options, there are specific rules for Medicare supplement changes. In general, beneficiaries enroll in a Medicare Supplement plan during their Medigap Open Enrollment Period.

Those who wish to apply for or change Medicare Supplement plans outside the Medigap OEP, may have to go through medical underwriting. However, there are some instances when beneficiaries qualify for a guaranteed issue right. This depends on which sate a beneficiary lives in.

Medigap open enrollment

The suggested time to enroll in a Medicare Supplement is during the Medigap OEP. This is a 6-month period that starts when the beneficiary enrolls in Medicare Part B and is at least 65 years of age. Those who enroll during this time do not have to go through medical underwriting. Underwriting is when an insurance carrier can deny coverage due to an underlying medical condition.

Keep in mind, the Medicare Supplement Open Enrollment is entirely different than the Medicare Open Enrollment that takes place annually from October 15th through December 7th.

During the Medicare AEP, beneficiaries can change or drop their Medicare Advantage (Part C) or PDP (Part D) plan. Be sure not to confuse this with the fall Medicare open enrollment period. This period runs from October 15 to December 7 every year. During fall open enrollment, you can enroll in, change, or drop your Medicare Part D prescription drug plan or your Medicare Advantage (Part C) plan. In many states, enrollees do not use this enrollment period to change Medicare Supplement plans.

Guaranteed issue rights

Those who miss their Medicare Supplement OEP may still qualify for guaranteed issue to enroll in or change their Medicare Supplement without underwriting. There are specific circumstances that offer enrollees guarantee issue rights. Review some circumstances that allow for GI rights below:

1. Enrollees who live in one of the four GI issue states (CT, NY, NH or MA).
2. Individuals who have Medicare A and B as well as employer coverage and are losing their employer plan.
3. Beneficiaries who enroll in a MA/MAPD or PACE program when they are first eligible and change their mind within the first year of coverage.
4. Those who have a MA/MAPD plan and are moving out of their plan’s service area.
5. The MA/MAPD plan the beneficiary enrolls in leaves the service area.
6. The Medicare Supplement provider ends coverage through no fault of the enrollee.
7. Enrollees who left a Medicare Supplement plan to try an MA/MAPD plan for the first time can re-enroll in a Medicare Supplement within the first year of trying a MA/MAPD plan.

Click here to learn more about GI rights for Medicare Supplement enrollment

What if you don’t qualify for a GI right

Those who do not qualify for a guaranteed issue right but still wish to change their Medicare Supplement plan may need to go through underwriting. If the beneficiary is healthy, most likely they will pass medical underwriting and receive approval for a new plan.

Beneficiaries with pre-existing conditions may be approved for a new plan although they may pay higher premiums. In some instances, the carrier may deny the beneficiary coverage.

Free look period

A free look period is a 30-day window that some Medicare Supplement enrollees can use to decide if they are happy with their new plan choice. This free look is available if a beneficiary changes from one Medicare Supplement to another.

What to remember when switching Supplements

When considering making a change in Medicare coverage, it is a good idea to get advice from a licensed Medicare agent. A licensed agent understands all your coverage options as well as your needs. They can sort out area plans and help guide you to making an informed decision.

Those who enroll in a new plan should not cancel their old plan until their new enrollment is confirmed. Beneficiaries may also want to pay for both plans for the first month in the event they decide not to keep the new plan.

Once the beneficiary is accepted into the new plan, they must cancel their current Medicare Supplement plan. If they do not, they will be charged for both plans. Those who are unsure about keeping the new plan can wait a month and pay for both to make sure they are happy with the new coverage.

Beneficiaries can request cancellations over the phone or in writing. Those who request the disenrollment over the phone should record a reference number for the call. It is also a good idea to make sure payment for the old plan does not continue.

Learn more about Medicare enrollment periods

More Rules for Medicare Supplement changes:

If a beneficiary moves to another state, they can remain in their current Medicare Supplement plan even if it is not offered in the new state. Although the new state may have its own Medicare Supplements that offer a better price point. A licensed Medicare agent can help find plan options in the new area.

Click here to fill out an online contract and join the Crowe team

Subscribe to our YouTube channel and access all our free training videos