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September 28, 2024 - On Friday, the Centers for Medicare & Medicaid Services (CMS) announced that average premiums, benefits, and plan choices for Medicare Advantage (MA) and the Medicare Part D prescription drug program will remain stable in 2025. Average premiums are projected to decline in both the MA and Part D programs from 2024 to 2025. Enhancements adopted in the 2025 MA and Part D Final Rule, as well as payment policy updates in the 2025 MA and Part D Rate Announcement, support this stability and increase enrollee protections and access to care for people with Medicare. In addition, the Inflation Reduction Act is reducing prescription drug costs and delivering more comprehensive benefits than ever before, including an annual $2,000 cap on out-of-pocket drug costs. CMS is committed to ensuring these programs work for people with Medicare, that they have access to strong and stable choices, and that they have the information they need to make informed choices about what is best for them.
CMS is releasing this key information, including 2025 premiums, benefits, and access to plan options for MA and Medicare Part D prescription drug plans, ahead of the upcoming Medicare Open Enrollment, which runs from October 15, 2024, to December 7, 2024, to help people with Medicare determine the best Medicare coverage option for their health care needs.
“Through the historic Inflation Reduction Act, the Medicare program is meeting the needs of people with Medicare more than ever before,” said CMS Administrator Chiquita Brooks-LaSure. “In 2025, average premiums and benefits for Medicare Advantage and the Medicare Part D prescription drug program are expected to remain stable, and Medicare enrollees will have access to a wide range of affordable Medicare coverage options. We encourage all people with Medicare to review their health care coverage during Open Enrollment.”
“Medicare enrollees will have robust coverage choices in Medicare for 2025, and these options include vital enhancements to make sure that plans meet the affordability and coverage needs of people with Medicare,” said Meena Seshamani, MD, PhD, CMS Deputy Administrator and Director of the Center for Medicare. “These improvements include capped annual out-of-pocket costs for drugs at $2,000, more complete access to mental health and substance use disorder treatment services and increased protections from predatory marketing and improper prior authorization practices.”
Medicare Advantage
The average monthly plan premium for all MA plans, which includes MA plans that provide prescription drug coverage and MA Special Needs Plans (SNPs), is projected to decrease from $18.23 in 2024 to $17.00 in 2025. Benefit options will remain stable, including MA supplemental benefit offerings such as hearing, dental, and vision. The amount of rebate dollars, which can be used for supplemental benefits, will remain stable, with a slight increase, from 2024 to 2025. Enrollment in MA is projected to be 35.7 million in 2025, an increase from 2024, with MA enrollment representing approximately 51% of all people enrolled in Medicare.
Medicare Part D
CMS continues to deliver savings on prescription drugs for people with Medicare prescription drug coverage, including through the new $2,000 out-of-pocket cap on their annual prescription drug costs in 2025—a result of the Inflation Reduction Act. Additionally, the Medicare Prescription Payment Plan, which will be offered by all Part D plans starting January 1, 2025, will enable people with Medicare Part D coverage the option to pay out-of-pocket prescription drugs costs in the form of monthly payments over the course of the calendar year instead of all at once to the pharmacy. People with Medicare prescription drug coverage can opt-in to the Medicare Prescription Payment Plan directly through their Part D plan sponsor.
The average total Part D premium is projected to decrease by $7.45 in 2025, from $53.95 in 2024 to $46.50 in 2025. These averages reflect the cost of Part D coverage for people with Medicare who pay full premiums. These numbers do not include the over 14 million people with Medicare who have a $0 premium through the Extra Help program (also referred to as the Low-Income Subsidy program). In addition, the Part D premiums paid by people with prescription drug coverage through MA plans may be even less because this Part D average premium does not reflect the Part D premium reductions that MA plans with prescription drug coverage apply using MA rebate dollars to further decrease the cost of prescription drug coverage in joint MA and Part D plans.
The average stand-alone Part D plan total premium is projected to decrease from $41.63 in 2024 to $40.00 in 2025 (a decrease of $1.63). After the application of MA rebates, which reflects what people in MA plans with prescription drug coverage will actually pay, the average Part D total premium for MA plans with prescription drug coverage is projected to decrease from $15.56 in 2024 to $13.50 in 2025 (a decrease of $2.06).
CMS previously announced the Medicare Part D bid information for contract year 2025, to help Part D plan sponsors finalize their Part D and Medicare Advantage offerings. This included the Part D base beneficiary premium of $36.78 and the national average monthly bid amount of $179.45 for 2025. CMS also announced a voluntary demonstration to support the implementation of the redesigned Part D benefit, improve market stability, and address premium variation for people with Medicare Part D in 2025. With the Medicare Part D Premium Stabilization Demonstration, people with Medicare Part D will continue to have stable, affordable choices of prescription drug plans. This voluntary demonstration provides additional premium stabilization to address variation in plans’ bids in the stand-alone Part D market, with the goal of improving the efficiency and economy of the Part D program as changes to the design of the Part D benefit are implemented. Approximately 99% of people with Medicare enrolled in a stand-alone Part D plan in 2024 are currently enrolled in a stand-alone Part D plan offered by a plan sponsor that opted into the demonstration for 2025.
Medicare Open Enrollment
In 2025, people with Medicare will see improvements thanks to the Inflation Reduction Act and other new enhancements to the programs that protect enrollees, to promote continual quality improvement, and increase competition – ultimately improving access for people with Medicare. People with Medicare should review and compare Medicare health and drug plans, especially this year with the new changes.
Medicare Open Enrollment begins October 15, 2024, and ends December 7, 2024. During this time, people eligible for Medicare can compare 2025 coverage options on Medicare.gov. Medicare.gov, as well as the Medicare Plan Finder, provides clear, easy-to-use information to allow people to compare options for health and drug coverage, which may change from year to year, to find one that best fits their needs.
Medicare Plan Finder will be updated with the 2025 Medicare health and prescription drug plan information by October 1, 2024. During Open Enrollment, people with Medicare are encouraged to call 1-800-MEDICARE or contact their State Health Insurance Assistance Programs (https://www.shiphelp.org/) for help comparing plans and costs this year. 1-800-MEDICARE is also available 24 hours a day, seven days a week, to provide help in English and Spanish as well as language support in over 200 additional languages. People who want to keep their current Medicare coverage do not need to re-enroll.
To help with their Medicare costs, low-income seniors and people with disabilities may qualify to receive financial assistance from the Medicare Savings Programs (MSPs). The MSPs help millions of Americans access high-quality health care at a reduced cost, yet only about half of eligible people are enrolled. The MSPs help pay Medicare premiums and may also pay Medicare deductibles, coinsurance, and copayments if people meet the conditions of eligibility. Enrolling in an MSP reduces Medicare costs, helping people better afford other necessities like food, housing, or transportation. Individuals interested in learning more can visit https://www.medicare.gov/basics/costs/help/medicare-savings-programs.
In addition, Extra Help is a Medicare program that helps qualifying individuals pay Part D premiums, deductibles, coinsurance, and other costs. In 2024, this program was expanded thanks to the Inflation Reduction Act, allowing all eligible enrollees to benefit from no deductibles, no premiums, and fixed lower copayments for certain medications. Enrollees can save nearly $300 per year, on average. According to estimates, up to 3 million seniors and people with disabilities who aren’t currently enrolled could benefit from the Extra Help program. Individuals who enroll in MSPs automatically qualify for help affording their prescription drugs through the Extra Help program. To learn more about Extra Help, visit Medicare.gov/extrahelp.
For more information on MA and Medicare Part D offerings for 2025, view the fact sheet.
To view the premiums and costs of 2025 Medicare Advantage and Part D plans, please visit https://www.cms.gov/medicare/coverage/prescription-drug-coverage. Select the 2025 landscape source file in the downloads section of the webpage. This year, CMS has combined the Landscape files into one file, instead of five individual files as was the case historically, and made additional enhancements to improve the end-user experience and simplify the format. The accompanying readme file at the link above provides important notes about the format and file columns.
For state-by-state information, important dates, and enrollment resources for Medicare Advantage and Part D in 2025, please visit: https://www.cms.gov/files/document/2025-ma-part-d-landscape-state-state-fact-sheet.pdf.
For information on the Medicare Advantage Value-Based Insurance Design Model, including plan participation in 2025, please visit: https://www.cms.gov/newsroom/fact-sheets/medicare-advantage-value-based-insurance-design-model-calendar-year-2025-model-participation.
Source: CMS
