The newly released 2025 stand-alone Medicare Part D prescription drug plans (PDPs) from the Centers for Medicare and Medicaid Services (CMS) show a continuation of the trend toward fewer plan options and potential premium increases for many beneficiaries. Here’s a detailed look at the initial findings and what you can expect for 2025:

1. Significant Reduction in Available Plans

Medicare beneficiaries will have fewer stand-alone Part D plans to choose from in 2025. The total number of available PDPs will shrink by 26%, dropping from 709 plans in 2024 to just 524 options in 2025. On average, each state will offer 16 PDP options, down from 21 in the previous year. This decrease may simplify choices for some beneficiaries but also means fewer alternatives for those seeking coverage.

2. Average Premiums Show a Slight Increase

For 2025, the average premium for stand-alone Medicare Part D plans will increase by 4%, rising to $61.98. However, when weighted by current enrollment, the average premium will actually decline by 5% to $39.36. This reflects a trend where a larger portion of enrollees are selecting lower-cost plans. The introduction of CMS’s Premium Stabilization Demonstration program has played a role in keeping premium increases in check, but it comes with a hefty price tag, estimated at $5 billion.

3. A Percentage of Beneficiaries Will See Higher Premiums

While some beneficiaries will see stable or lower premiums, as many as 38% of current enrollees may face a premium increase, averaging an additional $20.61 per month in 2025. To avoid this hike, affected members might consider switching to a lower-premium Part D plan or exploring Medicare Advantage plans that include prescription drug coverage.

4. More Low-Cost Premium Options Available

Despite the overall decrease in available plans, beneficiaries will find more low-premium Part D plans (those with premiums under $25). However, changes vary by state: some states will see fewer low-premium plans, while others will see an increase. Notably, $0 premium Part D plans will be available in all but seven states for 2025.

5. Premium Ranges: The Lowest and Highest Plans

For 2025, the Wellcare Value Script (PDP) remains one of the most affordable stand-alone Part D options, with a $0 premium in most states. On the other hand, the most expensive plan will be the Blue MedicareRx Premier (PDP), which has a premium of $190.80 per month and is available in several northeastern states.

6. Fewer $0 Premium LIS Plans Available

There will be a slight reduction in the number of Low-Income Subsidy (LIS) $0 premium plans available across the country in 2025. Several states will have as few as two $0 premium LIS options, while Wisconsin will offer the largest number of these plans with six.

7. Deductibles Remain Prevalent

Similar to previous years, around 85% of 2025 Part D plans will include a deductible. The standard deductible will increase to $590, but some plans will continue to exclude lower-tier drugs from the deductible, allowing for first-dollar coverage on these medications.

8. The Donut Hole is Eliminated

In a significant change for 2025, the Coverage Gap (Donut Hole) will no longer exist. After spending $2,000 out-of-pocket on covered drugs, beneficiaries will move directly to Catastrophic Coverage, where cost-sharing is reduced for the remainder of the year.

9. Understanding the $2,000 Out-of-Pocket Cap

The new $2,000 annual cap on out-of-pocket spending for Part D formulary drugs is an important feature for 2025. Once beneficiaries spend $2,000 on covered medications, they will no longer face out-of-pocket costs for the rest of the year. However, premiums and non-formulary drug costs will not count toward this cap.

10. Payment Smoothing Available for 2025

Beneficiaries will also have the option to spread out their prescription drug costs across the entire year through a payment smoothing program. This allows beneficiaries to avoid large out-of-pocket expenses in the early part of the year and evenly distribute their spending over 12 months.

11. Insulin and Vaccines Remain Affordable

All Medicare Part D plans and Medicare Advantage plans with drug coverage will continue to offer insulin at a $35 monthly copay for a 30-day supply. Additionally, ACIP-recommended vaccines, including the shingles and pneumonia vaccines, will remain available at no cost to beneficiaries across all 2025 Medicare Part D and Medicare Advantage plans. This includes vaccines recommended by the Advisory Committee on Immunization Practices (ACIP), ensuring that preventive care remains affordable and accessible.

12. Annual Plan Changes Require Careful Review

As always, Medicare Part D plans can change from year to year. Whether it’s premiums, deductibles, or coverage options, it’s important for beneficiaries to carefully review their plan for 2025. Even if you’re satisfied with your current plan, these changes could affect your costs or coverage.

This early look at the 2025 Medicare Part D landscape highlights several changes that could impact your prescription drug coverage and out-of-pocket costs. Be sure to stay informed as more updates on drug pricing, formularies, and Medicare plan star ratings become available in the coming months.

For more information on these changes and personalized assistance in reviewing your Medicare plan options, visit our website or consult with a Plan Medicare expert.