Through the Medicare open enrollment interval from October 15 to December 7 every year, folks with Medicare can enroll in a plan that gives Half D prescription drug protection, both a stand-alone prescription drug plan (PDP) for folks in conventional Medicare, or a Medicare Benefit plan that covers all Medicare advantages, together with prescribed drugs (MA-PD). In 2024, 53 million of the 67 million Medicare beneficiaries are enrolled in Medicare Half D plans, together with employer-only group plans; of the full, 57% are enrolled in MA-PDs and 43% are enrolled in stand-alone PDPs. This evaluation supplies an outline of Half D plan availability, premiums, and value sharing in 2025 and key developments over time. (Separate analyses of 2025 Medicare Benefit plans, premiums and advantages are additionally accessible.) (See Strategies field for particulars on this evaluation.)
Total, KFF evaluation exhibits that the marketplace for Half D protection stays sturdy primarily based on the general variety of plan choices, however the variety of sponsors, plans, and enrollees within the stand-alone PDP market has trended downward over time, whereas the MA-PD market stays secure and continues to expertise regular enrollment progress. Partially, this displays the predominance of low- or zero-premium MA-PDs and the provision of additional advantages, that are enabled by rebates within the Medicare Benefit fee system and amplified by aggressive advertising. Month-to-month premiums for stand-alone PDPs are considerably larger than for MA-PDs.
Adjustments to the Half D profit within the Inflation Discount Act, together with a brand new $2,000 out-of-pocket drug spending cap, will imply decrease out-of-pocket prices for some Half D enrollees however larger prices for Half D plans general. Some stand-alone PDPs are rising month-to-month premiums for 2025 by as much as $35, the utmost enhance allowed for plans taking part in a brand new premium stabilization demonstration, whereas a bigger share of MA-PD plans are imposing deductibles for drug protection and coinsurance for sure sorts of medicine in 2025 in comparison with 2024. Half D plans usually make different modifications from one yr to the following that would have an effect on drug protection and prices, together with modifications to formularies and most well-liked pharmacies, re-enforcing the worth for Half D enrollees in evaluating plans through the annual open enrollment interval.
Medicare Half D Highlights for 2025
The common Medicare beneficiary has a selection of 48 Medicare plans with Half D drug protection in 2025, together with 14 Medicare stand-alone prescription drug plans (7 fewer than in 2024) and 34 Medicare Benefit drug plans (2 fewer than in 2024). Over the previous 10 years, the variety of PDPs accessible to the typical beneficiary has decreased by 52% whereas the variety of MA-PDs has elevated by 143%.
The variety of corporations providing stand-alone PDPs has dropped from 11 in 2024 to 7 in 2025, together with a discount within the general variety of PDPs (down from 709 to 464).
In 2025, a smaller variety of PDPs will likely be “benchmark” plans – that’s, PDPs accessible for no month-to-month premium to Medicare Half D enrollees receiving the Low-Revenue Subsidy (LIS) – than in any yr since Half D began. Medicare beneficiaries could have entry to 1 much less benchmark PDP in 2025 than in 2024, on common – two out of the typical 14 PDPs accessible general. An estimated 1.1 million LIS enrollees (26% of all LIS PDP enrollees) want to modify plans through the 2024 open enrollment interval in the event that they wish to be enrolled in a benchmark plan in 2025.
The estimated common enrollment-weighted month-to-month premium for Medicare Half D stand-alone PDPs is projected to be $45 in 2025, a modest enhance from $42 in 2024 (primarily based on June 2024 enrollment). After accounting for enrollment selections by new enrollees and plan modifications by present enrollees, the precise common weighted PDP premium for 2025 is prone to be decrease than the estimated common of $45.
Month-to-month premiums for drug protection are estimated to be six instances larger for PDPs in comparison with MA-PDs in 2025 – $45 versus $7. The common month-to-month premium is projected to extend for PDPs however lower for MA-PDs. MA-PD sponsors can use rebate {dollars} from Medicare funds to decrease or remove their Half D premiums, in addition to present further advantages, however there isn’t a equal rebate system for PDPs.
Common month-to-month premiums for the 12 nationwide PDPs are projected to vary from round $3 to $128 in 2025. Premium variation throughout plans is partially associated as to if plans supply primary or enhanced advantages and the worth of advantages supplied, in addition to variation within the underlying prices that plans incur for his or her enrollees.
Greater than half of non-LIS Half D PDP enrollees (7.0 million out of 13.1 million) will see a discount or no change of their month-to-month premium in 2025 in the event that they make no modifications throughout open enrollment, however 1 in 5 non-LIS PDP enrollees (2.6 million) will see their month-to-month premium enhance by $35 in the event that they keep of their identical plan for 2025. That is the utmost enhance allowed for PDPs taking part within the new Half D premium demonstration, which incorporates measures meant to stabilize the PDP market as main modifications to the Half D profit take impact in 2025, together with a brand new $2,000 out-of-pocket drug spending cap.
The share of MA-PD enrollees who will likely be in plans that cost a deductible for Half D protection will almost triple from 21% in 2024 to 60% in 2025 if they don’t swap plans. Most stand-alone PDP enrollees (84%) will even be enrolled in plans that cost a deductible for drug overage in 2025, much like the share in 2024 (87%). (Among the enrollees in these plans obtain low-income subsidies that cowl their deductible.) The common deductible in 2025 will likely be greater than twice as giant for PDP enrollees as for MA-PD enrollees ($486 versus $225) (the usual deductible in 2025 is $590).
Many Half D enrollees will face coinsurance quite than copayments for each most well-liked manufacturers and non-preferred medicine, which may imply much less predictable out-of-pocket prices. This features a bigger share of MA-PD enrollees in comparison with 2024: 28% will likely be in plans that cost coinsurance for most well-liked manufacturers versus 2% in 2024, and 57% will likely be in plans that cost coinsurance for non-preferred medicine versus 11% in 2024. Amongst PDP enrollees, 83% will likely be in plans that cost coinsurance for most well-liked manufacturers and 100% in plans charging coinsurance for non-preferred medicine in 2025. For specialty tier medicine (people who price greater than $950 per thirty days), median coinsurance will likely be 25% for PDP enrollees and 30% for MA-PD enrollees.
Half D Plan Availability
For 2025, the Common Medicare Beneficiary Has Fewer Stand-Alone Prescription Drug Plan Choices Than in Prior Years however a Comparable Variety of Medicare Benefit Drug Plan Choices
The Half D marketplace for 2025 presents the typical Medicare beneficiary fewer selections for drug protection from stand-alone prescription drug plans than in prior years, however the same variety of selections for protection from Medicare Benefit drug plans. The common Medicare beneficiary has a selection of 48 choices for Half D protection in 2025, together with 14 PDPs (7 fewer than in 2024) and 34 MA-PDs (2 fewer) (Determine 1). Over the previous 10 years, the variety of PDPs accessible to the typical beneficiary has decreased by 52% whereas the variety of MA-PDs has elevated by 143%.
Of the 14 PDPs accessible to the typical beneficiary in 2025, 12 are nationwide PDPs (accessible in all 34 PDP areas nationwide) (Appendix Desk 1). This discount of two nationwide PDPs from 2024 is the results of one plan sponsor (CVS Well being/Aetna) consolidating its 3 PDP choices in 2024 (SilverScript Alternative, Plus, and SmartSaver) to 1 PDP in 2025 (SilverScript Alternative). The two.0 million enrollees within the SilverScript Plus and SmartSaver PDPs (as of June 2024) will likely be mechanically enrolled in SilverScript Alternative for 2025 until they select a unique plan throughout open enrollment.
A Whole of seven Companies Will Supply 464 Stand-Alone Prescription Drug Plans in 2025, the Lowest Variety of PDP Sponsors and Plans Since Half D Began
The variety of corporations sponsoring stand-alone PDPs is reducing from 11 corporations in 2024 to 7 corporations in 2025, the smallest quantity for the reason that Half D profit was launched (Determine 2). Because of the market withdrawal of Mutual of Omaha from the PDP market and the termination of Clear Spring Well being PDPs by the Facilities for Medicare & Medicaid Providers (CMS) attributable to low high quality rankings over three years, the 537,000 enrollees in these corporations’ PDPs (as of June 2024) might want to choose a brand new Half D plan from a unique plan sponsor through the 2024 open enrollment interval if they need their Half D protection to proceed in 2025.
A complete of 464 PDPs will likely be supplied by these 7 corporations within the 34 PDP areas (plus one other 10 PDPs within the territories), a lower of 245 PDPs (-35%) from 2024, and the bottom variety of PDPs accessible in any yr since Half D began in 2006.
Regardless of the discount in PDP availability general, beneficiaries in every state could have a selection of a number of plans, starting from 12 PDPs in 12 states and the District of Columbia to 16 PDPs in California, plus a number of MA-PDs supplied on the native stage (Determine 3, Appendix Desk 2).
Premiums
Stand-Alone Prescription Drug Plan Enrollees Will Pay Larger Month-to-month Premiums Than Medicare Benefit Drug Plan Enrollees in 2025 – $45 versus $7, on Common
The estimated nationwide common month-to-month PDP premium is projected to be $45 in 2025, which is six instances larger than the typical $7 month-to-month premium for drug protection in MA-PDs (Determine 4). Between 2024 and 2025, the typical month-to-month premium is rising by $3 for PDPs however reducing by $2 for MA-PDs. MA-PD sponsors can use rebate {dollars} from Medicare funds to decrease or remove their Half D premiums and supply further advantages, however there isn’t a equal rebate system for PDPs. In accordance with MedPAC, Medicare Benefit month-to-month rebates per enrollee have greater than doubled since 2018, from $95 to $194 in 2024, and of the $194 complete month-to-month rebate quantity in 2024, $24 was used to cut back MA-PD Half D premiums.
It’s seemingly that, after accounting for enrollment selections by new enrollees and plan modifications by present enrollees, the precise common weighted PDP premium for 2025 will likely be decrease than the estimated weighted common of $45 however nonetheless properly above the typical MA-PD premium.
There are two mechanisms in place which can be serving to to constrain Half D premium will increase for PDPs between 2024 and 2025:
One is a premium stabilization provision within the Inflation Discount Act that capped annual progress within the Half D base beneficiary premium at 6% starting in 2024. (The bottom beneficiary premium shouldn’t be the identical as the quantity that Half D enrollees pay for protection, and the regulation didn’t cap the expansion in particular person plan premiums to six%.)
The opposite is a brand new voluntary Half D premium stabilization demonstration for PDPs, which capped premium will increase at $35 per thirty days, together with different measures meant to stabilize the PDP market as modifications to the Half D profit take impact in 2025, together with a brand new $2,000 out-of-pocket drug spending cap. MA-PDs will not be eligible for this demonstration.
With out these mechanisms in place, it’s seemingly that the typical PDP premium enhance, and month-to-month PDP premium quantities in 2025, would have been bigger.
Common Month-to-month Premiums for the 12 Nationwide PDPs Are Projected to Vary from $3 to $128 in 2025
Precise Half D premiums for 2025 fluctuate broadly throughout plans, as in earlier years, and could also be rising by kind of than the nationwide common (and even reducing). Among the many 12 nationwide PDPs, there’s a distinction of greater than $1,500 in common annual premiums between the highest-premium PDP and the lowest-premium PDP. On the excessive finish, the month-to-month premium for Humana Premier Rx Plan (the eighth largest plan by general enrollment) will likely be $128, totaling greater than $1,500 yearly. On the low finish, the month-to-month premium for Wellcare Worth Script (the most important plan) will common simply over $3, or $38 yearly (Determine 5).
Along with Humana Premier Rx Plan, two different nationwide PDPs will cost month-to-month premiums of greater than $100 in 2025, on common: Cigna Healthcare Further Rx, the twelfth largest plan ($102), and Wellcare Medicare Rx Worth Plus, the tenth largest plan ($107). An estimated 1.3 million folks will likely be enrolled within the 3 nationwide PDPs that cost greater than $100 per thirty days in premiums in 2025 in the event that they make no modifications to their protection throughout open enrollment. One other 2.0 million enrollees pays a median $95 month-to-month premium for the AARP Medicare Rx Most popular PDP in 2025, until they swap plans.
Month-to-month premiums for a number of nationwide PDPs fluctuate broadly round every plan’s nationwide common (Determine 5). For six of the 12 nationwide PDPs, there’s a distinction of $90 or extra throughout the 34 PDP areas between the plan’s lowest and highest premiums. For instance, the month-to-month premium for the AARP Medicare Rx Saver PDP averages $67 however ranges from $0 to $128 throughout areas; and for Humana Fundamental Rx, the typical premium is $43 however ranges throughout areas from $0 to $121. For many of those 12 nationwide plans, month-to-month premiums are constantly larger in New York and California relative to different areas.
Extra Than Half of Stand-Alone PDP Enrollees Will See a Discount or No Change in Their Month-to-month Premium in 2025 if They Keep in Their Present Plan
Of the 13.1 million Half D PDP enrollees who’re accountable for paying your complete premium, which excludes Low-Revenue Subsidy (LIS) recipients, greater than half (54%), or 7.0 million enrollees, will see both a discount of their month-to-month premium (41%) or no change (13%) in the event that they keep of their present plan for 2025 (Determine 6). Slightly below half of Half D stand-alone plan enrollees (46%, or 6.0 million) will see their month-to-month premium enhance in 2025 in the event that they make no change to their protection throughout open enrollment for 2025. That is decrease than the two-thirds of non-LIS PDP enrollees (66%, or 8.6 million) who had been projected to pay larger month-to-month premiums in the event that they remained of their plan for 2024.
Of the 6 million non-LIS PDP enrollees who will see a rise of their Half D premium in the event that they keep of their present plan, 3.4 million (26% of non-LIS PDP enrollees general) will see a rise of lower than $35 and a couple of.6 million (20% general) will see a rise of precisely $35. That is the utmost month-to-month premium enhance allowed for PDPs taking part within the new Half D premium stabilization demonstration. In accordance with CMS, just about all PDP enrollees are in plans sponsored by insurers that opted to take part within the voluntary demonstration.
Medicare Half D enrollees in nationwide PDPs in 2024 will face a variety of premium will increase and reduces in the event that they make no change to their protection for 2025 throughout open enrollment (Determine 7). Notably, enrollees in two of the three PDPs sponsored by CVS Well being-Aetna might see substantial premium modifications, with the consolidation of SilverScript Plus and SilverScript SmartSaver PDPs into one PDP for 2025 (SilverScript Alternative). In the event that they make no modifications throughout open enrollment, the 0.3 million enrollees in SilverScript Plus in 2024 will see their month-to-month premiums decreased by greater than half when they’re crosswalked to SilverScript Alternative, from $103 to $45. Then again, the 1.7 million enrollees in SilverScript SmartSaver will face a considerable enhance, from $11 to $44, on common.
Deductibles and Value Sharing
6 in 10 Medicare Benefit Drug Plan Enrollees Will Be in Plans That Cost a Deductible for Drug Protection in 2025, up from 1 in 5 in 2024, and the Common Deductible is Growing 4-Fold for MA-PD Enrollees
Amongst MA-PD enrollees, 60% (10.9 million) will likely be a plan that prices a deductible for drug protection in the event that they keep of their identical plan, although solely 11% will likely be in a plan that prices the usual $590 deductible (Determine 8). The share of MA-PD enrollees who will likely be in plans charging a deductible for drug protection in 2025 is rising considerably over 2024 ranges, when solely 21% of MA-PD enrollees had been in a plan charging a drug deductible, together with 3% in plans charging the usual deductible quantity.
A majority of PDP enrollees (84% or 14.5 million) will likely be in plan that prices a drug deductible in 2025, together with three-fourths (76%) who will likely be in a plan that prices the usual deductible of $590, assuming no change in enrollment (Determine 8). (These estimates embrace Half D enrollees receiving Low-Revenue Subsidies, who don’t pay a deductible no matter whether or not their plan prices one.)
The common drug deductible charged by MA-PD plans is rising four-fold from $59 in 2024 to $225 in 2025 (Determine 9). Of the 34 MA-PD plan selections accessible to the typical beneficiary in 2025, 7 will cost the usual $590 deductible, whereas 13 will cost no deductible. In distinction, solely 3 of the 36 MA-PD plan choices accessible to the typical beneficiary in 2024 charged the usual deductible and 21 MA-PDs charged no deductible.
For PDP enrollees, the typical deductible is rising from $423 in 2024 to $486 in 2025 – a better common deductible quantity however a smaller enhance than for MA-PD enrollees, reflecting the truth that most PDP enrollees had been already (and can proceed to be) enrolled in plans that cost the usual deductible. Of the 12 nationwide PDPs in 2025, 8 will cost the usual $590 deductible, 2 will cost a decrease deductible, and a couple of will cost no deductible.
A Bigger Share of MA-PD Enrollees Will Face Coinsurance Relatively Than Copayments for Most popular Manufacturers and Non-Most popular Medicine in 2025 In comparison with 2024
In 2025, as in prior years, Half D enrollees will face a lot larger cost-sharing quantities for manufacturers and non-preferred medicine (which may embrace each manufacturers and generics) than for medicine on a generic tier, and a mixture of copayments and coinsurance for various formulary tiers. Coinsurance can imply much less predictable out-of-pocket prices than copayments. The standard five-tier formulary design in Half D contains tiers for most well-liked generics, generics, most well-liked manufacturers, non-preferred medicine, and specialty medicine.
In a notable change for 2025, a bigger share of MA-PD enrollees is in plans charging coinsurance quite than flat copayments for most well-liked manufacturers and non-preferred medicine in comparison with 2024 ranges. The share of MA-PD enrollees going through coinsurance for most well-liked manufacturers is rising from 2% in 2024 to twenty-eight% in 2025, and the share going through coinsurance for non-preferred medicine is rising from 11% in 2024 to 57% in 2025.
Amongst all Half D plans, median commonplace price sharing in 2025 for several types of medicine is (Determine 10):
Generics: $0 for most well-liked generics and $5 for different generics in each PDPs and MA-PDs.
Most popular manufacturers: a copayment of $47 in each PDPs and MA-PDs, or coinsurance of 20% in PDPs and 24% in MA-PDs); 83% of PDP enrollees and 28% of MA-PD enrollees face coinsurance quite than copayments for most well-liked manufacturers.
Non-preferred medicine: For non-preferred medicine, which may embrace each manufacturers and generics, all PDP enrollees face a median coinsurance of 40%; 57% of MA-PD enrollees face a median coinsurance price of 42%, and 43% of MA-PD enrollees face a median copayment of $100.
Specialty medicine: Median coinsurance for specialty medicine is 25% for PDP enrollees and 30% for MA-PD enrollees.
Among the many 12 nationwide PDPs, 8 PDPs will cost $0 for most well-liked generics in 2024, however copays of $45 to $47 or coinsurance of 15% to 25% for most well-liked manufacturers, and coinsurance starting from 31% to 50% for non-preferred medicine; 4 out of the 12 nationwide PDPs are charging the utmost 50% coinsurance for non-preferred medicine. Coinsurance for specialty tier medicine ranges from 25% to 33% in these plans, with 8 of the 12 nationwide PDPs charging 25% and a couple of charging 33%. (Plans that cost the usual deductible quantity of $590 can’t cost greater than 25% for specialty tier medicine.)
Low-Revenue Subsidy Plan Availability
In 2025, a Smaller Variety of Stand-Alone PDPs Will Be Premium-Free to Enrollees Receiving the Low-Revenue Subsidy Than in Any Yr Since Half D Began
By means of the Half D LIS program, enrollees with low incomes and modest property are eligible for help with Half D plan premiums and value sharing. Practically 14 million Half D enrollees are receiving LIS, together with 9 million (66%) in MA-PDs and 4.7 million (34%) in PDPs.
In 2025, a smaller variety of PDPs will likely be premium-free benchmark plans – that’s, PDPs accessible for no month-to-month premium to Medicare Half D enrollees receiving the Low-Revenue Subsidy (LIS) – than in any yr since Half D began, with 90 premium-free benchmark plans, or 19% of all PDPs in 2025 (Determine 11). The variety of benchmark plans accessible in 2025 will fluctuate by area, from one to 5 (Appendix Desk 2).
PDPs providing primary advantages qualify to be benchmark plans if they’ve premiums beneath the benchmark quantity in a area. The benchmark is calculated as a weighted common of the beneficiary premiums for primary drug protection supplied by each PDPs and MA-PDs in a area (calculated earlier than taking MA rebates under consideration). (MA-PD premiums are included on this calculation though MA-PDs don’t qualify as benchmark plans.)
On common, LIS beneficiaries could have 2 benchmark plans accessible to them out of the typical 14 PDPs accessible general for 2025 – one fewer than the typical variety of benchmark plan choices in 2024. All LIS enrollees can choose any plan supplied of their space, but when they enroll in a non-benchmark plan, they have to pay some portion of their chosen plan’s month-to-month premium.
One quarter (26%) of all LIS PDP enrollees who’re eligible for premium-free Half D protection (1.1 million LIS enrollees) pays Half D premiums averaging $30 per thirty days in 2025 until they swap or are reassigned by CMS to premium-free plans through the open enrollment interval.
Juliette Cubanski is with KFF. Anthony Damico is an unbiased contractor.
Strategies
This evaluation focuses on the Medicare Half D drug plan market in 2025 and developments over time, together with each stand-alone prescription drug plans (PDPs) and Medicare Benefit drug plans (MA-PDs). The evaluation focuses on the 17.6 million enrollees in PDPs and 18.1 million enrollees in particular person MA-PDs (as of June 2024). The evaluation excludes enrollees in non-individual MA-PDs (together with Particular Wants Plans) and enrollees in employer-group solely PDPs and MA-PDs plans for whom plan premium and advantages information are unavailable.
Information on Half D plan availability, enrollment, and premiums had been collected from a set of information information launched by the Facilities for Medicare & Medicaid Providers (CMS):
Medicare plan panorama file, launched every fall previous to the annual open enrollment interval
Half D plan crosswalk information, launched every fall
Half D contract/plan/state/county stage enrollment information, launched month-to-month
Half D Low-Revenue Subsidy enrollment information, launched every spring
Medicare plan profit package deal information, launched periodically every year
On this evaluation, premium and deductible estimates are weighted by June 2024 enrollment until in any other case famous. Share and greenback variations are calculated primarily based on non-rounded estimates and in some instances differ from percentages and greenback variations calculated primarily based on rounded estimates offered within the textual content.
