US Medicare Announces Decrease in Part D and Advantage Premiums for 2025, Reports Reuters

By Ahmed Aboulenein

WASHINGTON – Average premiums and benefits for Medicare’s prescription drug program and private Medicare plans are expected to remain stable in 2025, with a slight decrease in premiums, according to the Centers for Medicare and Medicaid Services.

Why It Matters

These premiums are significant for consumers enrolled in Medicare Advantage plans, which are administered by private insurers reimbursed by the government. Health plans determine premiums and benefits based on these reimbursement rates. The government aims to reduce Medicare Advantage costs to align them more closely with original Medicare, the federal health program for people aged 65 and older.

Private health insurers have expressed concerns that lowering their rates could restrict the benefits they provide. However, the government’s recent projections indicate that these figures will remain stable. Following the announcement of rate changes in April, shares of health insurers dropped between 6% and 12%.

Context

Medicare serves as the U.S. government’s health insurance program for individuals over 65 and those with disabilities. Medicare Advantage plans are offered by private insurers who receive a fixed payment from the government to manage healthcare for beneficiaries seeking additional benefits not available through traditional Medicare. Additionally, Medicare includes an optional prescription drug coverage program known as Part D.

In April, the Centers for Medicare and Medicaid Services revealed its final 2025 rates for Medicare Advantage payments, which included a modest 0.2% reduction. This decision is part of a three-year strategy aimed at aligning payment rates with original Medicare.

Key Statistics

Enrollment in Medicare Advantage plans is projected to reach 35.7 million individuals in 2025, representing 51% of all Medicare beneficiaries, up from 50% in 2024. Average monthly premiums for Medicare Advantage are expected to decrease by $1.23, from $18.23 in 2024 to $17 in 2025.

Nearly 60% of beneficiaries will have zero-dollar premiums in 2025, and 83% will either maintain or see lower premiums if they remain with their current plan, including 20% who will experience a reduction. The average Part D premiums are projected to decline by $7.45 in 2025 to $46.50, down from $53.95 in 2024.