Medicare in 2025 – What to Know

Published on September 17, 2025 | Webster Bank

If you’re nearing age 65 or already enrolled in Medicare, it’s important to stay up to date on how the program is evolving. Every year brings small changes, and 2025 is no different. Whether you’re planning your first enrollment or reviewing your current coverage, understanding what’s new may help you be more informed and give you confidence in your decisions about your healthcare.

Let’s take a look at what’s changing with Medicare in 2025, what Medicare covers, when to enroll, and how to find the appropriate coverage for your needs.

A Quick Medicare Refresher

Medicare is the federal health insurance program primarily for people age 65 and older. It is also available to some people under age 65 with qualifying disabilities and people with end-stage renal disease or ALS.

There are four basic parts of Medicare, which are:

1. Part A – Hospital insurance
2. Part B – Medical insurance
3. Part C – Medicare Advantage (which is an alternative to “Original Medicare” Parts A & B)
4. Part D – Prescription drug coverage

You may choose Original Medicare (Parts A and B) with optional add-ons (like a Medigap plan and/or Part D) or go with a Medicare Advantage Plan (Part C), which bundles coverage in one plan.

What’s New for Medicare in 2025?

Several important updates are taking effect in 2025 that may impact your decisions.

1. Prescription Drug Costs Are Going Down

The Inflation Reduction Act continues to roll out improvements to Medicare’s prescription drug benefits. In 2025, the biggest change is a $2,000 cap on out-of-pocket drug costs for people with Medicare Part D plans. This might be a game-changer for anyone who relies on expensive medications.

There are some other changes as well. More drugs are being added to Medicare’s drug price negotiation list, which may lower prices. Certain insulin products remain capped at $35 per month. And any vaccines recommended by the CDC are still available at no cost.

2. Medicare Advantage Plans Are Expanding

Medicare Advantage plans continue to grow in popularity, and in 2025, more than half of Medicare beneficiaries are expected to be enrolled in one. These plans are often appealing because they offer extra benefits like dental, vision, and hearing coverage. They may also include gym memberships, wellness perks, and transportation assistance with the possibility of lower premiums or lower out-of-pocket caps.

That said, these plans usually require you to stay within a provider network. If you travel frequently or your area has a number of out-of-network providers, it’s important to compare plans carefully to make sure you have adequate coverage.

3. Telehealth Coverage Remains Strong

Medicare expanded telehealth access during the pandemic, and those changes are largely sticking around. In 2025, Medicare continues to cover some virtual visits, especially patients requiring behavioral and mental health services, rural patients, and those with chronic condition management needs.

When (and How) to Enroll in Medicare

Timing your enrollment is key to avoiding late fees and gaps in coverage.

Initial Enrollment Period (IEP)

This seven-month window starts three months before your birth month when you turn 65, includes your birth month, and ends three months after your birth month. For example, this means if you turn 65 on September 1, 2025, your IEP runs from June 1, 2025, to January 1, 2026. Enroll on time to avoid late penalties, especially for Part B and Part D¹.

Still Working Past 65?

If you’re still working and have credible coverage through your employer (typically one with 20 or more employees), you may be able to delay Medicare Part B without penalty. In that case, you qualify for a Special Enrollment Period (SEP) when your employer coverage ends. But even if you delay Part B, many people still enroll in Part A (which is usually premium-free) at age 65, since this provides extra hospitalization coverage.

What Medicare Covers—and What It Doesn’t

Original Medicare (Parts A & B) covers inpatient hospital care, skilled nursing facility care, doctor visits, outpatient care, preventive services (e.g., flu shots, cancer screenings), and some home health care.

But it doesn’t cover routine dental, vision, or hearing care, long-term or custodial care, most prescription drugs (unless you enroll in Part D), eyeglasses, dentures, or hearing aids, or care received outside the U.S.

That’s why many people add a Part D plan (for prescriptions), and/or a Medigap policy (to help pay deductibles and copays), or a Medicare Advantage Plan that combines Part D and Medigap into one package.

Medigap in 2025: Should You Consider a Supplement Plan?

If you choose Original Medicare, you may want a Medigap (Medicare Supplement) plan to help cover the “gaps” in coverage, like coinsurance, deductibles, and copays².

Medigap plans are standardized and labeled by letters (Plan G, Plan N, etc.). They’re sold by private insurance companies and cannot be combined with Medicare Advantage plans.

A reasonable time to buy a Medigap policy is during your six-month Medigap Open Enrollment Period, which begins when you’re 65 and enrolled in Part B. After that window passes, you might be subject to medical underwriting requirements that are more complex.

What If You Travel or Split Time Between States?

If you’re a snowbird or frequent traveler, Original Medicare with a Medigap plan may offer more flexibility, since it doesn’t require staying in a specific provider network. Medicare Advantage plans, on the other hand, often have regional provider networks and may require referrals.

So if flexibility is key for your lifestyle, that’s something to factor in.

How to Think About Medicare for 2025

Here are a few questions to ask yourself that may help guide your choices:

• Do I take any expensive medications?
• Do I want dental, vision, or hearing coverage?
• Do I travel often or live in multiple states?
• Am I okay with a specific provider network, or do I want flexibility?
• What’s my monthly budget for premiums and out-of-pocket costs?

Bottom Line – Medicare in 2025 Offers More Choices Than Ever

Between expanded Medicare Advantage benefits, lower drug costs, and continued telehealth access, 2025 is shaping up to be a decent year for Medicare beneficiaries. However, more choices bring more challenges, so you need to review your options carefully.

Whether you’re enrolling for the first time or evaluating your current plan, it’s essential to look at your full financial and health circumstances before making decisions.

Important Disclosures

Content in this material is for educational and general information only and not intended to provide specific advice or recommendations for any individual.

All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.

This article was prepared by WriterAccess.

LPL Tracking #733175

Footnotes

¹ Special Enrollment Periods https://www.medicare.gov/basics/get-started-with-medicare/get-more-coverage/joining-a-plan/special-enrollment-periods

² Which path is right for me? https://www.medicare.gov/basics/get-started-with-medicare/other-paths