CMS Projects Stability for Medicare Advantage & Part D in 2025

On Friday, September 27, the Centers for Medicare & Medicaid Services (CMS) released their annual Medicare Advantage (MA) and Part D outlook for 2025.

Their announcement of MA and prescription drug plan premium, benefit, and plan choice stability is exciting and encouraging! Thanks to the Inflation Reduction Act and other new program enhancements, Medicare beneficiaries will see improvements in 2025.

Read on to discover what CMS projects for MA and Part D offerings for the upcoming plan year.

Medicare Advantage in 2025: Stable and Accessible

The MA program should provide Medicare beneficiaries with plenty of plan choices and stable premiums and benefit offerings in 2025. Since MA enrollment is expected to grow to 35.7 million in 2025, as indicated in the 2024 Trustees Report, this is great news for both you and your clients!

MA Premium Cost

CMS reported, the average monthly plan premium for all MA plans, including those with prescription drug coverage, is expected to decrease by $1.23, dropping from $18.23 in 2024 to $17 in 2025. Additionally, many MA enrollees who remain in their current plans in 2025 will see a benefit from doing so – 60 percent of enrollees in their current plan will have a $0 premium and 83 percent of enrollees will have the same or lower premium.

MA Plan Choices

Just like in previous years, access to MA plans with prescription drug coverage will remain widespread throughout the country. Almost all Medicare enrollees will have access to at least one MA plan in their area and 10 or more MA plan choices when including Special Needs Plans (SNPs). Also, there will still be a robust selection of the average number of MA plan offerings per county in 2025, with 34 Medicare Advantage Prescription Drug plans (not including SNPS) and 65 MA plans (including SNPs).

Specifically, the number of SNPs available will grow by nine percent between 2024 and 2025 – representing about a quarter of total plans! This increase comes just in time as SNP enrollments are projected to grow to about 28 percent of MA enrollment.

MA Benefit Offerings

The benefit offerings, including supplement benefits, of MA plans should remain stable. For 2025, the projected rebates received by MA plans will reflect a slight increase, averaging $210 per member per month. These rebate dollars are accrued when MA plans bid below the set benchmark and this money must be used to offer supplemental benefits, reduce cost sharing and Part D basic premiums, and/or reduce the Medicare Part B premium. Additionally, access to MA plans with dental, vision, and hearing, benefits will remain widespread throughout the market.

In 2025, 111 parent organizations — an increase of six from 2024 — will offer at least one special supplemental benefit for the chronically ill (SSBCI).

MA Improvements for 2025

Upgrades to the MA program based on changes by the Biden-Harris Administration that were finalized in April 2024 will go into effect in 2025. Some of these include:

• Improved access to behavioral health services
• Increased prior authorization transparency
• Guardrails for supplemental benefits
• Improved coordination for dual-eligibles

Part D in 2025: Affordable and Robust

At the end of July, CMS announced the 2025 Medicare Part D bid information. They reported a Part D base beneficiary premium of $36.78 and a national average monthly bid amount of $179.45 for 2025. CMS has now come out with further Part D predictions that are good news for your clients.

Part D Premium Cost

The projected average total Part D premium is set to decrease by $7.45 in 2025, from $53.95 in 2024 to $46.50 in 2025. (This does not reflect the Part D premium reductions MA plans with prescription drug coverage apply using MA rebate dollars.) For stand-alone Part D plans, the average total premium is expected to decrease by $1.63, dropping from $41.63 in 2024 to $40 in 2025. Also, the average total premium for MAPD plans is expected to decrease $2.06, dropping from $15.56 in 2024 to $13.50 in 2025.

Note: These averages reflect the cost of Part D coverage for beneficiaries who pay full premiums and not those participating in the Extra Help program.

Generally speaking, the decline in premium is due to the premium stabilization mechanism in the IRA and the new voluntary premium stabilization demonstration. Nearly 99 percent of Medicare beneficiaries with a stand-alone Part D plan are currently enrolled in a plan that has opted into the demonstration for 2025.

Part D Plan Choices

Along with probable decreased Part D premium costs, beneficiaries can expect to have abundant access to Part D plans in 2025. This entails access to an average of 15 stand-alone Part D plans per region, which is in addition to the average of 34 MA plans with prescription drug coverage offerings available per county.

Additionally, the Part D coverage looks to remain robust. Upon comparing 2025 Part D formularies to 2024, CMS found no significant decreases in formulary inclusion or changes to tier placement of drugs.

Part D Improvements for 2025

There are Part D creditable coverage changes coming in 2025 in relation to the Inflation Reduction Act (IRA) and Final Calendar Year (CY) 2025 Part D Redesign Program Instructions. According to the Office of the Assistant Secretary for Planning and Evaluation, the Inflation Reduction Act’s redesign of the Medicare Part D benefit will reduce out-of-pocket spending by about $7.4 billion annually among more than 36 percent of Part D enrollees. Additional Part D benefit updates to take place in 2025 include:

• Individual out-of-pocket costs for prescription drugs will be capped at $2,000
• Enrollees can opt into the Medicare Prescription Payment Plan
• Cost-sharing continues to be capped at $35 for covered insulins & $0 for Part D recommended adult vaccines
• Supplemental Part D benefits count towards individual out-of-pocket costs
• The Manufacturer Discount Program will replace the Coverage Gap Discount Program

This outlook for MA and Part D in 2025 certainly looks good to us! Potential savings and steady plan offerings with competitive benefits can help your sales and keep your clients healthy and happy!

With the changes to come, Ritter is here to help you navigate through them all. If you aren’t partnered with us yet, complete your quick and free registration now. We can provide industry updates, sales tools, and resources to make your 2025 look just as bright!