Get ready for these 6 big changes to Medicare in 2025

“When I was young, a lot of people worked for a company with a pension plan that covered them for as long as they lived. If they didn’t have a pension plan, they could rely on Social Security and Medicare.”

— Robert Kiyosaki, businessman and book author Rich dad, poor dad series

As fewer people have pensions and more people rely on 401(k)s and IRAs, they still rely on Social Security and Medicare. By last year, more than 71 million people were receiving benefits from the Social Security Administration. And Medicare recently covered more than 67 million people.

As you approach retirement — or just think about and plan for it — you should learn about both programs and keep up with their changes.

Image source: Getty Images.

Here are six changes coming to Medicare in 2025.

1. Say goodbye to “doughnut holes”

If you know a little about Medicare, you may be familiar with the “doughnut hole.” This is the period after you and your drug insurance plan have spent a certain amount on prescriptions, when you you must pay until another amount has been spent — at which point insurance coverage resumes.

Starting in 2025, the donut hole is gone, replaced by a $2,000 annual cap on out-of-pocket expenses for prescription drugs.

2. You’ll be able to pay for prescriptions over time

When you go to the pharmacy to pick up your medicine, you usually have to pay your share right there and then. This changes in 2025, when you will be able to split your payments into several installments. This can be handy if the price of a drug is steep, as some are.

3. The Medicare Part B premium will change

As you may know, there are currently two types of Medicare coverage, and you can (and usually should) enroll in one of them as you approach age 65. One option is “original” Medicare, which includes Part A (hospital coverage) and Part B (doctor/medical insurance) – and which enrollees typically supplement with a Part D prescription drug plan and sometimes , with an additional Medigap coverage plan.

The other option is a Medicare Advantage plan, sometimes called Part C. These plans are offered by insurance companies, not the government, but are required by law to provide at least as much coverage as original Medicare and generally offers more — like coverage for vision, hearing and dental care.

There are pros and cons to both options, but know that no matter what you choose, you’ll still have to pay a premium for Part B — and that premium is usually updated each year, generally increasing. So the 2025 Part B premium is likely to be slightly higher than the 2024 premium.

4. It might be easier to see a mental health professional

Many Medicare enrollees had difficulty finding available mental health professionals. This is changing for the better. More mental health providers will be authorized to serve Medicare enrollees starting in 2025. These include addiction counselors, licensed mental health counselors, and marriage and family therapists.

5. You may have access to a weight loss drug

Traditionally, Medicare has not approved drugs for weight loss. But Part D coverage and some Medicare Advantage plans may approve such drugs when prescribed for other purposes.

Some of the relatively new and popular weight-loss drugs, such as Mounjaro and Ozempic, can be prescribed for those with diabetes, and Wegovy has been approved by the Food and Drug Administration for overweight people with cardiovascular disease.

So you might find that in 2025, your care provider might be able to prescribe a drug that can help you lose weight — while also providing other benefits.

6. You could pay less — potentially much less — for your prescriptions

This change actually goes into effect in 2026, but it’s a big one and you can look forward to it throughout 2025. Thanks to the Inflation Relief Act of 2022, Medicare was given permission to negotiate drug prices with drug companies and had resulting in reduced prices. for 10 popular drugs, such as Januvia and Entresto (which treat diabetes and heart failure, respectively), with the lower prices in effect in 2026. Prices have been cut by between 38% and 79%.

But wait — there are more! The plan is for 15 more drug prices to be negotiated for 2027, another 15 for 2028 and another 20 for 2029 and beyond. So within a few years, a lot of widely prescribed drugs should drop in price, often significantly.

These are just a few of the many changes that have been announced for Medicare. If you follow the news, you’ll likely see more changes announced in the coming months and years — changes that will often be very welcome, contributing to a better retirement.