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Retirement planning in 2025 demands attention to rising health care costs, with Medicare Part B premiums jumping to $185—a $10.30 increase from 2024—impacting 65 million beneficiaries.

For our clients here at Davenport & Associates, this hike signals a need for action.

If you’re asking yourself “How much are Medicare premiums in 2025?” or “What’s my plan for long-term care?”, this blog explores the changes, costs, and strategies to navigate them.

The 2025 Medicare Premium Hike

The Centers for Medicare & Medicaid Services (CMS) announced in November 2024 that the 2025 Medicare Part B premium will rise to $185 monthly, up from $174.70, with the annual deductible increasing to $257 from $240.

This 5.9% increase reflects higher healthcare costs and program spending.

Common question & answer: “How much are Medicare premiums in 2025?” – $185/month for most, plus higher amounts for incomes over $106,000 (individual) or $212,000 (joint) due to IRMAA.

Impact on Retirees

• Out-of-Pocket Costs: Couples face $845.57/month ($10,147/year) for Parts A, B, and a Plan G supplement.
• Long-Term Care: Medicare excludes nursing homes beyond 100 days, costing $110,360/year for a semi-private room.
• Stat: 17% of retirees have no health expense plan, risking a $172,500 lifetime burden.

Hidden Costs to Watch

Beyond premiums, retirees face:

• Deductibles: $1,676 for Part A hospital stays (60 days), $419/day coinsurance (61–90 days).
• Coinsurance: $209.50/day for skilled nursing (21–100 days), then 100% out-of-pocket.
• Part D: $30–$80/month for drugs, with a $2,000 out-of-pocket cap.
• Uncovered Services: Vision, dental, and over-the-counter meds add thousands annually.

Common question & answer: “What are the hidden costs of Medicare in 2025?” – Coinsurance, uncovered services, and premium surcharges for high earners.

Strategies to Manage Costs

Strategy	How It Works	2025 Tip
Medigap Plan	Covers gaps in Original Medicare	Choose Plan G ($146–$160/month) for balance.
HSA Savings	Use pre-tax funds for expenses	Max $4,150 (individual) or $8,300 (family).
Long-Term Care Insurance	Protects against nursing costs	Average $3,050/year for couples aged 55.
Review Plans Annually	Adjust during open enrollment	Switch Part D for lower copays.

Common question & answer: “How to plan for Medicare costs in retirement 2025?” – Combine Medigap, HSAs, and annual reviews.

Common Questions and Answers

• Is my health suffering from Medicare costs? Yes, if unplanned—17% lack strategies, per Fidelity.
• What’s my plan for long-term care? Insurance or savings, as Medicare covers only 100 days.
• How much are Medicare premiums with IRMAA? Up to $628.90/month for incomes over $500,000.

Don’t Let Costs Derail Your Retirement

With 88% of seniors worried about care costs, planning is urgent.

Common question & answer: “How to navigate health care costs in retirement 2025?” – Start with a Medigap review and consult a pro.

Contact Davenport & Associates for a free consultation or take our retirement ready quiz to see where your retirement stacks up.

References

1. Centers for Medicare & Medicaid Services (CMS) – 2025 Medicare Parts A & B Premiums and Deductibles – Official announcement of the $185 Part B premium and $257 deductible for 2025.
2. Fidelity Retiree Health Care Costs Estimate – Insights on 17% lacking health expense plans and lifetime costs of $172,500.
3. National Council on Aging – Long-Term Care Costs 2025 – Data on nursing home costs at $110,360/year and 88% senior concern.