Average premiums, benefits, and plan choice for Medicare Advantage and the Medicare Part D prescription drug program will remain stable in 2025, the Centers for Medicare & Medicaid Services (CMS) has announced.
The agency released information about 2025 premiums, benefits, and access to plan options for Medicare Advantage and Medicare Part D prescription drug plans, ahead of the upcoming Medicare Open Enrollment, which begins October 15 and runs through December 7, to help people with Medicare determine their best coverage option.
“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, M.D., Ph.D., CMS deputy administrator and director of the Center for Medicare, in the announcement. “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
CMS expects the average monthly plan premium for all Medicare Advantage plans, which includes those that provide prescription drug coverage and Medicare Advantage special needs plans, to decrease from $18.23 in 2024 to $17.00 in 2025. Benefit options will remain stable, including Medicare Advantage supplemental benefit offerings such as hearing, dental, and vision. CMS said there will be a slight increase in the amount of rebate dollars, which can be used for supplemental benefits.
Furthermore, enrollment in Medicare Advantage is projected to be 35.7 million in 2025, an increase from 2024, with Medicare Advantage enrollment representing approximately 51 percent of all people enrolled in Medicare.
CMS said in a fact sheet that it expects roughly 60 percent of Medicare Advantage enrollees in their current plan will have a zero-dollar premium in 2025. Approximately 83 percent of these enrollees will have the same or lower premium in 2025 if they continue in the same plan. Included in that group of enrollees, about 20 percent of all enrollees will see their premiums decline in 2025 if they stay in their current plans.
It also projects more special needs plans to be available. Indeed, the number of Medicare Advantage Special Needs Plans will grow by nine percent between 2024 and 2025 and represents about a quarter of total plans. Enrollment in these plans is expected to grow to 7.2 million in 2025, or roughly 28 percent of Medicare Advantage enrollment.
Medicare Advantage plans that also provide targeted supplemental benefits for the chronically ill (SSBCI) will also increase. In 2025, 111 parent organizations will offer at least one SSBCI benefit compared to 105 parent organizations in 2024.
Medicare Part D
CMS said that in addition to the new $2,000 out-of-pocket cap on their annual prescription drug costs in 2025 due to the Inflation Reduction Act, people with Medicare Part D plans will have the option to pay out-of-pocket prescription drug costs in the form of monthly payments over the course of the calendar year instead of all at once at the pharmacy. The Medicare Prescription Payment Plan will be offered by all Part D plans beginning January 1, 2025.
People with Medicare prescription drug coverage can opt-in to the Medicare Prescription Payment Plan directly through their Part D plan sponsor.
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CMS projects the average total Part D premium 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, CMS said the Part D premiums paid by people with prescription drug coverage through Medicare Advantage plans may be even less because the projections don’t include those who apply using Medicare Advantage rebate dollars. The rebate dollars could further decrease the cost of prescription drug coverage in joint Medicare Advantage and Part D plans.
CMS said it expects:
· The average stand-alone Part D plan total premium to decrease from $41.63 in 2024 to $40.00 in 2025 (a decrease of $1.63)
· The average Part D total premium for Medicare Advantage plans with prescription drug coverage to drop from $15.56 in 2024 to $13.50 in 2025 (a decrease of $2.06) with application of Medicare Advantage rebates
In the fact sheet, CMS said that it expects Part D enrollees to have access to an average of 15 stand-alone Part D plans per region. This is in addition to the average of 34 MA plans with prescription drug coverage offerings available per county.