Medicare 2025: An Introductory Guide

If you’ve reached age 64, you’re no doubt being inundated with Medicare information. We know it can feel pretty overwhelming. To help you figure out the Medicare options that are best for you, here are three basic questions to consider:

1. What’s Medicare?

The short answer: Medicare is the national health insurance program of the United States, available to every U.S. citizen 65 and older who has paid Medicare taxes while working. You may also be eligible for Medicare if you are disabled or have end stage renal disease.

Original Medicare is made up of two parts:

• Part A: Hospital insurance — This helps pay for inpatient care in a hospital or limited time at a skilled nursing facility (following a hospital stay). Part A also helps pay for some home health care and hospice care.
• Part B: Medical insurance — This pays 80 percent after your deductible for outpatient-type care, like your visits to doctors and specialists, lab work, diagnostic tests, medical services and supplies.

You can enroll in Original Medicare Part A (hospital insurance), Original Medicare Part B (medical insurance), or both. When to enroll (or change plans) is important, and is addressed in question #3 below.

Of course, medical care consists of more than doctor visits and hospitals. So to help cover things like prescriptions and to fill in that 20-percent left uncovered by Part B, you have a few options to complete your coverage.

You can also purchase:

• Part D: Prescription drug coverage — Run by Medicare-approved private insurance companies, this coverage helps pay for prescription medications.
• Medicare supplement insurance coverage — Run by private insurance companies and also picks up where Original Medicare leaves off to help cover out-of-pocket costs like the 20 percent of your Part B expenses.

Or, instead of the options above, you can choose:

• Part C: Medicare Advantage – This is an alternative to Original Medicare Parts A and B; it replaces Original Medicare, though you must be enrolled in Original Medicare first before joining a Medicare Advantage plan. Medicare Advantage plans are all-in-one plans run by Medicare-approved private insurance companies. Some include coverage for prescriptions, dental and vision, as well as other perks. The main advantage is that monthly premiums are usually lower, and some plans even feature a $0 monthly premium. Often, the greatest disadvantage is that you are locked into a health provider network (like an HMO or PPO plan), and you may need to get referrals in order to see specialists.

2. What will Medicare cost?

There are many Medicare plan and coverage options, giving you plenty of flexibility to find a monthly premium that fits your budget. Some plans have a low monthly premium and a higher copay, which may be ideal if you don’t often need medical care. Other plans may have a higher monthly premium with low or no copays.

As a common rule-of-thumb example, you might pay¹*:
Part A premium:……………. $0 with qualifying work history
Part B premium:……………. $185 a month (varies by income level and is set annually by the government)
Part D premium:……………. $46.50 per month (while the average monthly premium is around $46.50, some plans’ premiums are less)²
Medicare supplement plan:……………. $159 per month³
Potential total:……………. $390.50 per month
* Dollar amounts given are 2025 costs.

Part B and Part D IRMAA may apply depending on your income level. If your modified adjusted gross income is above a certain amount, you may pay a Part B and Part D income-related monthly adjustment amount (Part B and Part D IRMAA). It’s based on the modified adjusted gross income reported on your tax return from two years ago. You’ll pay this amount in addition to your monthly plan premium, and it’s paid directly to Medicare, not to your plan. Most people have this taken out of their Social Security checks. Social Security will contact you if you have to pay IRMAA.

In addition to monthly premiums, most plans have additional costs. Our free, downloadable PDF provides additional details, including information on deductibles, copays and coinsurance.

3. When should I enroll?

In most cases, you have seven months to enroll — starting three months before the month you turn 65 and ending three months after; this is known as your Initial Enrollment Period. It’s important to enroll during this time period to avoid potential penalties.

If you’re already 65 or older and are transitioning out of other health coverage, such as an employer’s plan, you can enroll within eight months of the date you no longer have your group health plan coverage in order to avoid penalties. This eight-month period following the end of your employer-provided coverage is known as the Special Enrollment Period. Enrollment periods for Part D may vary. Learn more about Medicare’s enrollment periods.

You’ll find more details in the free, downloadable PDF.

How do I choose?

The hardest task can be deciding which type of Medicare coverage might be right for you.

To begin narrowing things down, consider your lifestyle, your budget and your health care needs.

• What kind of insurance do you have now? What is working for you, and what would you like to change?
• What’s your monthly budget?
• Would you be able to get all the health care you need from a single, local network? Or will you be traveling a lot and need more options?
• Will you need dental, vision or prescription drug coverage?
• Which plan would help give you the most peace of mind? Are you comfortable with paying copays as you use your plan in order to get lower premiums up front?

For more guidance on which Medicare options can work best for you, go to Mutual of Omaha’s Medicare Advice Center.

Once you’ve answered the above questions, you can better choose between these options:

• Original Medicare with a Part D prescription drug plan and a Medicare supplement insurance policy
• A Medicare Advantage plan

If you travel frequently and want the freedom to see any doctor who accepts Medicare and to see specialists without a referral, a Medicare supplement insurance plan may be right for you. These plans have a higher monthly premium, but you will usually pay less each time you get care.

If you’d prefer a lower-cost option, you don’t mind getting referrals to see specialists, and you can obtain all the care you need from a single network, a Medicare Advantage plan may be right for you. These plans have a lower monthly premium, but you may pay more each time you get care.

Download our free PDF Mutual of Omaha’s 2024 Medicare Guide: Finding the Right Plan for You, to see the most common coverage options and their associated costs, plus additional details on Medicare for 2024.

DISCLAIMERS

¹ Source: https://www.cms.gov/newsroom/news-alert/cms-releases-2024-projected-medicare-part-d-premium-and-bid-information and
² https://www.medicare.gov/basics/costs/medicare-costs

¹ Medicare.gov. Web Page: Costs. Retrieved Nov. 25, 2024. www.medicare.gov/basics/costs/medicare-costs

² Centers for Medicare & Medicaid Services. Web Page: Medicare Advantage and Medicare Prescription Drug Programs to Remain Stable as CMS Implements Improvements to the Programs in 2025. Retrieved on Nov. 25, 2024. www.cms.gov/newsroom/press-releases/medicare-advantage-and-medicare-prescription-drug-programs-remain-stable-cms-implements-improvements

³ ValuePenguin by Lending Tree. Web Page: How Much Does Medicare Cost in 2025? Retrieved Nov. 25, 2024.www.valuepenguin.com/medicare-cost

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