The tricky thing about budgeting for Medicare expenses is that there are different costs involved that can change from one year to the next. Most Medicare enrollees don’t pay a premium for Part A, which covers hospital care. But there are premiums associated with Part B, which covers outpatient care, and Part D, which covers prescription drugs.

In 2025, the standard monthly Medicare Part B premium is increasing from $174.70 to $185. And Part A enrollees will pay more for hospital care, too, in the form of higher inpatient deductibles and coinsurance rates. But here are a few reasons your Part D drug coverage may cost you more in the new year.

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1. Your plan’s premiums are rising

Medicare Part D premiums aren’t set in stone. So even if you decide to keep your current Part D plan, you may find that you’re shelling out more money for it come 2025.

If that’s the case, and you’ve been notified that your premium costs are going up, you may want to shop around for a new Part D plan while you still can. Medicare’s fall open enrollment period runs all the way through Dec. 7, so you still have a few more weeks to explore your options for drug coverage and see if there’s a more cost-effective plan you can sign up for.

2. Your prescriptions are being bumped into a higher tier

You may have your reasons for wanting to keep your current Medicare drug plan. But even if your premium costs aren’t rising, you might end up paying more in 2025 if your medications are being bumped into a higher tier.

Medicare Part D plans group prescriptions into different tiers. And those tiers determine the amount of money you pay out of pocket for your medications.

If your prescriptions are landing in a higher tier for 2025, you have a couple of options. First, you could try to find a different plan that classifies your drugs more favorably. Or, you can see if it’s possible to switch to less-expensive medications, or if there’s a generic version of the pills you take.

3. You’re subject to a surcharge for being a higher earner

The amount of money you pay for Medicare Part D coverage will hinge on your plan of choice. But no matter what that plan entails, if you’re a higher earner, you may be subject to a surcharge known as an IRMAA, or income-related monthly adjustment amount.

Here are the income thresholds for IRMAAs in 2025:

Data source: CMS.gov. Table by author.

Keep in mind that IRMAAs are based on your income from two years prior. In some situations, it’s possible to appeal a Part D IRMAA, so that may be an option worth exploring if your rise in income a couple of years ago was only temporary.

When you’re retired and on a fixed income, it’s important to budget carefully for your essential expenses. Be mindful of the factors that could cause your Part D costs to rise in 2025 so you can take action as needed to avoid financial stress.

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