How Medicare Costs Keep Creeping Up—Even When You’re Not Using the Coverage That Much

Key Takeaways

• Even if you rarely use your Medicare coverage, you’re still paying monthly premiums, and those amounts are increasing in 2025 across Part A (if applicable), Part B, and Part D.

• Additional out-of-pocket costs like deductibles, coinsurance, and the new out-of-pocket cap on prescription drugs can impact you even if you only need care occasionally.

Why You’re Paying More for Medicare in 2025

You may not visit the doctor often or need prescriptions regularly, yet your Medicare-related expenses keep rising. It’s not your imagination. The reality is that Medicare costs are increasing for nearly all enrollees in 2025, and this trend isn’t only driven by frequent users of care. Even if you rarely use your coverage, you’re affected by rising premiums, changing deductibles, and the structural way Medicare spreads risk and costs.

Medicare Works on a Shared Risk Model

Medicare isn’t pay-as-you-go insurance. Instead, it works on a shared-risk principle. That means everyone pays into the system, even if they don’t use many healthcare services in a given year. This spreads the financial risk across the entire Medicare population, which helps keep care accessible for those who need it most.

Unfortunately, it also means:

• Premiums rise to reflect overall program costs

• You help subsidize the care of sicker or more complex patients

• Inflation and healthcare innovation drive costs higher

You’re not just paying for your care. You’re paying into a system designed to protect the entire eligible population.

Monthly Premiums Keep Increasing

In 2025, the standard monthly premium for Medicare Part B is $185. That’s up from $174.70 in 2024. The increase may feel small on the surface, but over 12 months, that adds up. And higher-income beneficiaries continue to pay even more under the Income-Related Monthly Adjustment Amount (IRMAA).

If you have to pay a Part A premium (which applies if you don’t have enough work history), that amount has also increased:

• $518 per month if you paid Medicare taxes for fewer than 30 quarters

• $284 per month if you paid Medicare taxes for 30 to 39 quarters

Part D premiums vary by plan, but in 2025 the national average premium has slightly decreased to $46.50. Still, that doesn’t mean your total spending on prescriptions is lower, because…

Prescription Drug Spending Is Capped, But You Still Pay Plenty

In 2025, Medicare Part D introduces a long-awaited out-of-pocket cap of $2,000. This change is significant. It eliminates the coverage gap (previously called the “donut hole”) and offers more predictability for your budget.

However, here’s the catch:

• You still have to pay your deductible (up to $590)

• You still pay coinsurance until the $2,000 limit is reached

• High-cost medications may push you to that limit faster

Even if you don’t take many medications, the cost of brand-name or specialty drugs can hit you hard. And if you spread your medication costs over time using the new Prescription Payment Plan, you’re still paying — just in installments.

Deductibles Are Rising, Too

Alongside rising premiums, deductibles for Medicare Parts A and B have gone up in 2025:

• Part A hospital deductible: $1,676 per benefit period (up from $1,632 in 2024)

• Part B medical deductible: $257 annually (up from $240 in 2024)

If you are hospitalized even once in a year, you’ll feel the impact of the higher Part A deductible. And if you require outpatient care, labs, or durable medical equipment, the Part B deductible kicks in before Medicare pays anything.

You Still Pay Coinsurance and Copayments

Once you meet your deductibles, Medicare doesn’t cover 100% of your costs. Here’s what you continue to owe in 2025:

• Part B coinsurance: You typically pay 20% of the Medicare-approved amount for covered services

• Part A coinsurance: For hospital stays beyond 60 days, you pay $419 per day (days 61–90) and $838 per day (for lifetime reserve days)

• Skilled nursing facility coinsurance: $209.50 per day for days 21–100

These costs can add up quickly, especially after a hospital stay, rehab, or specialist visit. Even if you use services only a few times a year, those coinsurance payments can still be substantial.

Annual Changes Add Up, Even Without Usage

Medicare costs typically rise every year. While the annual increases may seem small on paper, they add up in real dollars — especially over a span of five or ten years. The effects are cumulative.

If you enrolled in Medicare in 2020 and paid $144.60 per month for Part B, you’re now paying $40 more per month in 2025. That’s nearly $500 more per year for the same core benefits — and that doesn’t even include increases in your drug costs or supplemental coverage.

This happens regardless of whether you’ve had a single doctor visit or not. Your premium isn’t usage-based.

Supplemental Coverage Isn’t Free From Inflation Either

If you have a Medicare Supplement (Medigap) plan or enroll in a Medicare Advantage plan, you’re also exposed to rising costs, even if you don’t use your benefits much.

While you may not see a sharp rise in premiums every year, inflation, rising healthcare delivery costs, and regulatory shifts often lead to:

• Higher monthly premiums

• Increases in out-of-pocket maximums (for Medicare Advantage)

• Changes in plan networks or formulary coverage

Even if you rarely go to the doctor, you’re still paying more to maintain access to the benefits. It’s essentially a form of inflation-protected insurance — you’re keeping coverage in place in case you need it.

Preventive Services Are Free — But That’s Not the Whole Story

Medicare covers many preventive services at no cost to you:

• Annual wellness visits

• Screenings for cancer, diabetes, and cardiovascular disease

• Flu and pneumonia vaccines

However, diagnostic tests, treatment follow-ups, or anything beyond the preventive scope may result in coinsurance and deductibles.

For example:

• If a preventive screening leads to a biopsy, you’ll likely owe 20% of the cost under Part B

• If your wellness visit uncovers a new issue that requires treatment, your regular coinsurance and deductibles apply

So, even when you use only preventive care, the moment anything suspicious is found, your costs can quickly escalate.

Inflation in Healthcare Affects Everyone

Healthcare inflation affects Medicare just as much as private insurance. And even if you only use care occasionally, broader economic factors still impact what you pay. These include:

• Labor costs: Medicare reimburses hospitals and doctors based on labor costs, which continue to rise annually

• Medical innovation: New technologies, treatments, and diagnostics cost more and increase the baseline expenses Medicare must cover

• Administrative overhead: Compliance, technology, and reporting burdens have grown, affecting provider reimbursement and influencing costs indirectly

You might not personally need the latest drug or robotic surgery tool, but the inclusion of those tools in Medicare’s coverage menu contributes to overall cost increases.

Why You’re Still Paying More When Using Less

Here’s a summary of why your costs rise, even if your use doesn’t:

• Flat-rate premiums: You pay the same as others in your income tier, regardless of how often you use services

• Annual inflation: Premiums, deductibles, and copays are indexed to healthcare costs, not your usage

• Prescription drug dynamics: High prices and new drugs raise system-wide costs

• Cost-sharing design: You pay coinsurance every time you use a service, but pay premiums even when you don’t

In other words, Medicare isn’t a pay-per-use system. It’s a shared-cost system with price increases baked in annually.

Your Best Defense: Stay Informed and Review Annually

Even if you use Medicare sparingly, it pays to:

• Review your Annual Notice of Change (ANOC): See how your plan’s costs and coverage are changing for the next year

• Compare drug costs: Use the Medicare Plan Finder to check if your prescriptions are still covered affordably

• Assess your supplemental plan: Make sure the premium and out-of-pocket protection still make sense for you

• Watch for new benefits: Some Medicare Advantage plans add new benefits each year; confirm if they’re useful to you

While you may not use much care now, your health status can change at any time. Making sure your coverage still fits your needs is critical — and may help reduce surprise costs later.

Planning for What You Can’t Predict

The irony of Medicare is that the longer you go without needing it, the more you may question its cost. But the system is structured to make sure help is there when you need it — even if that’s tomorrow or ten years from now.

You may never hit the $2,000 Part D cap. You may never stay in a hospital more than one night. But you still need to budget for these possibilities, because your premiums and deductibles will continue to rise whether you use services or not.

Reviewing Your Medicare Spending Now Can Save You Later

Medicare’s rising costs can sneak up on you, even if you barely use the system. Understanding how shared risk, annual inflation, and structural cost-sharing work gives you a better foundation to plan. Whether you’re approaching retirement or have been enrolled for years, now is the time to reassess what you’re spending, what coverage you really need, and how to prepare for unexpected costs.

For help evaluating your options, get in touch with a licensed agent listed on this website. They can walk you through current Medicare costs and help ensure you’re not overpaying for underused coverage.