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6 Major Medicare Changes That Will Impact Everyone in 2025

If you're enrolled in Medicare, make sure you stay on top of these crucial changes.

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Updated Nov. 11, 2024
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Managing your medical expenses is an essential part of enjoying a stress-free retirement

If you're one of the more than 66 million Americans on Medicare, this means staying abreast of the yearly changes that the federal government makes to the insurance program.

Here are several Medicare changes that could impact your bottom line in 2025.

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A new out-of-pocket cap on medication costs

18percentgrey/Adobe doctor writing out RX prescription

Medicare Part D is the section of the program that helps cover costs for prescription drugs. 

Starting in January, your out-of-pocket prescription drug cost will be capped at $2,000 annually. This marks the first time Medicare Part D will have an out-of-pocket maximum.

Once you hit your max, you won’t have to make copayments or pay for coinsurance for the rest of the year. Remember, however, that these changes only apply to drugs Part D covers.

A new midyear Medicare Advantage statement

Vitalii Vodolazskyi/Adobe medicare part c insurance papers

Medicare Advantage — sometimes referred to as Medicare Part C — refers to Medicare-approved insurance plans offered by private insurance companies.

If you are on a Medicare Advantage plan, you can expect to start receiving a midyear statement highlighting the Medicare benefits you haven’t taken advantage of yet.

The end of the ‘donut hole’

Zamrznuti tonovi/Adobe male pharmacist prescribing medicines to woman

Previously, Medicare Part D plans had a coverage gap often referred to as a “donut hole.” 

This meant that once individuals had spent a specific amount of money for covered drugs in a given year, they would be responsible for paying drug costs out of pocket until they hit a yearly limit.

At that point, catastrophic coverage would kick in and help them cover the cost of medications.

In 2025, the doughnut hole is coming to a close. In addition, individuals will have the option to pay their prescription drug costs in monthly installments instead of at one time.

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Improved access to weight-loss drugs

Eric Hood/Adobe prescription pills over white background

For now, Medicare can’t legally pay for drugs prescribed specifically to help patients lose weight. 

However, if a doctor prescribes a weight-loss drug for a reason other than losing weight — for instance, managing your Type 2 diabetes — Medicare Part D will cover the medication.

In March, the Food and Drug Administration approved the drug Wegovy as a treatment for people who are overweight and have been diagnosed with cardiovascular disease. More Part D plans are expected to add the medication to their list of approved drugs in 2025.

Expanded family caregiver services

interstid/Adobe caregiver support walking with elderly woman

Many aging Americans receive care from family members. Starting this year, Medicare is increasing its support for family caregivers by offering training that teaches individuals how to administer medications, stick to treatment plans, and offer personalized care.

Medicare will also pay for respite care, which refers to temporary in-patient stays at Medicare-approved facilities to give your family caregiver a bit of a break. Each respite care stay can last for up to five days.

In 2024, Medicare introduced a pilot program called Guiding an Improved Dementia Experience, or GUIDE. This program supports patients with dementia and their unpaid caregivers with a 24/7 support line, training, and a care navigator.

In 2025, the program is set to quadruple in size, which should help more patients with dementia and their caregivers access services.

Wider coverage of mental health services

fizkes/Adobe pensioer visiting doctor

Medicare is about more than your physical health. It supports your mental health, too. A series of changes in 2025 should expand your access to vital mental health services.

For instance, addiction counselors, marriage and family therapists, and other types of mental health counselors will now be able to bill Medicare for their services.

Additionally, during your annual wellness visit, your physician will go over a health risk assessment to help identify any mental health needs. They can then refer you to relevant local services.

Bottom line

Vitalii Vodolazskyi/Adobe Stethoscope with medicare

As you age, you will likely spend more money on health care. Staying up to date about changes in Medicare can help you prepare financially for these costs.

By doing so, your physical, mental, and financial health can all benefit.

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Author Details

Michelle Smith

Michelle Smith has spent a decade writing for and about small businesses. She specializes in all things finance and has written for publications like G2 and SmallBizDaily. When she's not writing for work at her desk, you can usually find her writing for pleasure near large bodies of water.