US Medicare says Part D and Advantage premiums to drop in 2025, by Reuters

By Ahmed Aboulenein

WASHINGTON (Reuters) – Average premiums and benefits for Medicare’s prescription drug program and private Medicare plans are expected to remain flat in 2025, with premiums declining slightly, the Centers for Medicare and Medicaid Services said on Friday.

WHY IT’S IMPORTANT

Premiums are of interest to consumers enrolled in Medicare Advantage plans run by private insurers, which are then paid by the government, and to the health plans themselves, which set premiums and benefits based on reimbursement rates.

The government tried to reduce MA prices to the original level of Medicare, the government health plan for those 65 and older.

Private health insurers have argued that rate cuts would limit the benefits they provide, but government forecasts on Friday showed they remain stable. Health insurance rates fell between 6% and 12% in April when the rates were announced.

CONTEXT

Medicare is the US government’s health insurance program for people over age 65 and people with disabilities.

Medicare Advantage plans are offered by private insurers who are paid a rate set by the government to manage health care for Medicare beneficiaries who want additional benefits not offered in regular Medicare coverage.

Medicare also contains an optional prescription drug coverage program known as Part D.

The Centers for Medicare and Medicaid Services, which runs Medicare, announced its final 2025 rates for MA payments in April, which included a 0.2 percent cut.

The cut is part of a three-year plan to reduce payments to MA plans as part of an effort the government says will bring them more in line with original Medicare.

BY NUMBERS

Medicare Advantage plan enrollment will increase to 35.7 million people in 2025, or 51 percent of all Medicare beneficiaries, up from 50 percent in 2024.

MA average monthly premiums are projected to decrease by $1.23 from $18.23 in 2024 to $17 in 2025.

Nearly 60 percent of beneficiaries will have zero premiums in 2025 and 83 percent will have the same or lower premiums if they stay with their current plan, including 20 percent who will see premiums drop.

Average Part D premiums are projected to decline $7.45 in 2025 to $46.50, down from $53.95 in 2024.