Here are eight things to know:
- A number of changes to Part D benefits in the Inflation Reduction Act, signed in August 2022, take effect in 2025. Major changes beginning in 2025 include a $2,000 cap on out-of-pocket spending for enrollees, and a program to allow beneficiaries to pay their prescription co-pays in monthly installments.
- The changes resulted in higher premiums bids from Part D plans. The average bid for Part D plans increased 179% from 2024 to 2025, according to the Congressional Budget Office.
- In August, CMS pitched a plan to stabilize premiums. Plans participating in the demonstration were required to reduce base premiums by $15 a month for 2025. For subsequent years, plans cannot raise premiums by more than $35. CMS will take on more risk for plans’ potential losses as part of the demonstration.
- The vast majority of Part D plans opted into the demonstration.
- The demonstration will last for three years. For 2025, the $15 monthly reduction will cost $2.9 billion and the $35 increase cap will cost the federal government $1.8 billion. The risk changes will cost CMS $250 million, the CBO estimated.
- In a Sept. 27 news release, CMS said average Part D premiums will remain stable in 2025. A KFF analysis of Part D plans available in California found 8 of 16 plans will increase premiums, while 6 others will decrease costs.
- The premium stabilization program is expected to increase the federal deficit by $2 billion, according to the CBO’s analysis.
- Republican members of the Senate Finance Committee criticized the program as an “election-year stunt to artificially lower the cost of seniors’ Part D premiums.”
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