Medicare Part D Prescription Drug Program participants and Medicare Advantage participants are likely to pay less than last year for prescription drug coverage and plan costs. Medicare beneficiaries will see declines in Medicare Part D and Medicare Advantage plan premiums in 2025. This is great news for budget-conscious seniors who are on track to get the smallest Social Security COLA increase in four years.
Average total Medicare Part D premiums decline in 2025
In 2025, Medicare beneficiaries will have access to an average of 15 standalone Part D plans per region, according to the Centers for Medicare and Medicaid Services (CMS). When comparing the 2025 Part D formularies to 2024, CMS found no significant decreases in formulary inclusion or changes in drug class status.
Average total premiums for Part D beneficiaries are expected to decrease by $7.45 in 2025, from $53.95 in 2024 to $46.50 in 2025. Standalone Part D plan premiums from $41.63 in 2024 to $40.00 in 2025, a decrease from $1.63.
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Average Medicare Advantage premiums are expected to decline
CMS also announced that average premiums, benefits, and plan options for Medicare Advantage and the Medicare Part D drug program are expected to remain stable in 2025.
Nearly 60% of Medicare Advantage enrollees in their current plan will have a $0 premium in 2025, according to CMS.
The average monthly plan premium for all Medicare Advantage (MA) plans, which includes MA plans with prescription drug coverage, is expected to decrease by $1.23 from $18.23 in 2024 to $17.00 in 2025. CMS estimates that about 83% of enrollees will receive the same or lower premium in 2025 if they continue with the same plan.
The average MA plan with Part D prescription drug coverage is expected to decrease total premiums from $15.56 in 2024 to $13.50 in 2025 (a decrease of $2.06).
(Image credit: Getty Images)
Other changes coming to Medicare Part D in 2025:1. New annual cap of $2,000 for out-of-pocket prescription costs
Starting in 2025, people with Part D plans won’t have to pay more than $2,000 in out-of-pocket costs, thanks to a provision in the Inflation Reduction Act of 2022. The $2,000 cap will be tied to per capita growth. Part D costs, so they may rise every year after 2025.
This new rule applies only to drugs covered by your Part D plan and does not apply to out-of-pocket spending on Medicare Part B drugs. Part B medications are usually vaccines, doctor-administered injections, and some outpatient prescription medications.
2. The option to spread prescription drug costs throughout the year.
Part D enrollees will also have the option to spread their out-of-pocket costs throughout the year rather than experiencing high out-of-pocket costs in any given month. Part D enrollees who select this payment option will pay $0 to the pharmacy for covered Part D drugs, and Part D plan sponsors will then bill program participants monthly for any cost-sharing they incur while in the program.
3. Part D supplemental benefits are counted toward the individual’s individual costs
People enrolled in a Medicare Part D plan that offers enhanced supplemental benefits will have the added benefit of having these supplemental benefits count toward their out-of-pocket costs, bringing them to the $2,000 cap sooner for 2025.
For example, drugs that are excluded from the definition of a Part D drug, even in cases where the plan chooses to cover them as a supplemental benefit, such as hair growth drugs.
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