During the Medicare open enrollment period from October 15 to December 7 each year, people with Medicare can enroll in a plan that provides Part D prescription drug coverage, either a stand-alone prescription drug plan (PDP) for people in traditional Medicare, or a Medicare Advantage plan that covers all Medicare benefits, including prescription drugs (MA-PD). In 2024, 53 million of the 67 million Medicare beneficiaries are enrolled in Medicare Part D plans, including employer-only group plans; of the total, 57% are enrolled in MA-PDs and 43% are enrolled in stand-alone PDPs. This analysis provides an overview of Part D plan availability, premiums, and cost sharing in 2025 and key trends over time. (Separate analyses of 2025 Medicare Advantage plans, premiums and benefits are also available.) (See Methods box for details on this analysis.)
Overall, KFF analysis shows that the market for Part D coverage remains robust based on the overall number of plan options, but the number of sponsors, plans, and enrollees in the stand-alone PDP market has trended downward over time, while the MA-PD market remains stable and continues to experience steady enrollment growth. In part, this reflects the predominance of low- or zero-premium MA-PDs and the availability of extra benefits, which are enabled by rebates in the Medicare Advantage payment system and amplified by aggressive marketing. Monthly premiums for stand-alone PDPs are substantially higher than for MA-PDs.
Changes to the Part D benefit in the Inflation Reduction Act, including a new $2,000 out-of-pocket drug spending cap, will mean lower out-of-pocket costs for some Part D enrollees but higher costs for Part D plans overall. Some stand-alone PDPs are increasing monthly premiums for 2025 by up to $35, the maximum increase allowed for plans participating in a new premium stabilization demonstration, while a larger share of MA-PD plans are imposing deductibles for drug coverage and coinsurance for certain types of drugs in 2025 compared to 2024. Part D plans often make other changes from one year to the next that could affect drug coverage and costs, including changes to formularies and preferred pharmacies, re-enforcing the value for Part D enrollees in comparing plans during the annual open enrollment period.
Medicare Part D Highlights for 2025
- The average Medicare beneficiary has a choice of 48 Medicare plans with Part D drug coverage in 2025, including 14 Medicare stand-alone prescription drug plans (7 fewer than in 2024) and 34 Medicare Advantage drug plans (2 fewer than in 2024). Over the past 10 years, the number of PDPs available to the average beneficiary has decreased by 52% while the number of MA-PDs has increased by 143%.
- The number of firms offering stand-alone PDPs has dropped from 11 in 2024 to 7 in 2025, along with a reduction in the overall number of PDPs (down from 709 to 464).
- In 2025, a smaller number of PDPs will be “benchmark” plans – that is, PDPs available for no monthly premium to Medicare Part D enrollees receiving the Low-Income Subsidy (LIS) – than in any year since Part D started. Medicare beneficiaries will have access to 1 less benchmark PDP in 2025 than in 2024, on average – two out of the average 14 PDPs available overall. An estimated 1.1 million LIS enrollees (26% of all LIS PDP enrollees) need to switch plans during the 2024 open enrollment period if they want to be enrolled in a benchmark plan in 2025.
- The estimated average enrollment-weighted monthly premium for Medicare Part D stand-alone PDPs is projected to be $45 in 2025, a modest increase from $42 in 2024 (based on June 2024 enrollment). After accounting for enrollment choices by new enrollees and plan changes by current enrollees, the actual average weighted PDP premium for 2025 is likely to be lower than the estimated average of $45.
- Monthly premiums for drug coverage are estimated to be six times higher for PDPs compared to MA-PDs in 2025 – $45 versus $7. The average monthly premium is projected to increase for PDPs but decrease for MA-PDs. MA-PD sponsors can use rebate dollars from Medicare payments to lower or eliminate their Part D premiums, as well as provide extra benefits, but there is no equivalent rebate system for PDPs.
- Average monthly premiums for the 12 national PDPs are projected to range from around $3 to $128 in 2025. Premium variation across plans is in part related to whether plans offer basic or enhanced benefits and the value of benefits offered, as well as variation in the underlying costs that plans incur for their enrollees.
- More than half of non-LIS Part D PDP enrollees (7.0 million out of 13.1 million) will see a reduction or no change in their monthly premium in 2025 if they make no changes during open enrollment, but 1 in 5 non-LIS PDP enrollees (2.6 million) will see their monthly premium increase by $35 if they stay in their same plan for 2025. This is the maximum increase allowed for PDPs participating in the new Part D premium demonstration, which includes measures intended to stabilize the PDP market as major changes to the Part D benefit take effect in 2025, including a new $2,000 out-of-pocket drug spending cap.
- The share of MA-PD enrollees who will be in plans that charge a deductible for Part D coverage will nearly triple from 21% in 2024 to 60% in 2025 if they do not switch plans. Most stand-alone PDP enrollees (84%) will also be enrolled in plans that charge a deductible for drug overage in 2025, similar to the share in 2024 (87%). (Some of the enrollees in these plans receive low-income subsidies that cover their deductible.) The average deductible in 2025 will be more than twice as large for PDP enrollees as for MA-PD enrollees ($486 versus $225) (the standard deductible in 2025 is $590).
- Many Part D enrollees will face coinsurance rather than copayments for both preferred brands and non-preferred drugs, which can mean less predictable out-of-pocket costs. This includes a larger share of MA-PD enrollees compared to 2024: 28% will be in plans that charge coinsurance for preferred brands versus 2% in 2024, and 57% will be in plans that charge coinsurance for non-preferred drugs versus 11% in 2024. Among PDP enrollees, 83% will be in plans that charge coinsurance for preferred brands and 100% in plans charging coinsurance for non-preferred drugs in 2025. For specialty tier drugs (those that cost more than $950 per month), median coinsurance will be 25% for PDP enrollees and 30% for MA-PD enrollees.
Part D Plan Availability
For 2025, the Average Medicare Beneficiary Has Fewer Stand-Alone Prescription Drug Plan Options Than in Prior Years but a Similar Number of Medicare Advantage Drug Plan Options
The Part D market for 2025 offers the average Medicare beneficiary fewer choices for drug coverage from stand-alone prescription drug plans than in prior years, but a similar number of choices for coverage from Medicare Advantage drug plans. The average Medicare beneficiary has a choice of 48 options for Part D coverage in 2025, including 14 PDPs (7 fewer than in 2024) and 34 MA-PDs (2 fewer) (Figure 1). Over the past 10 years, the number of PDPs available to the average beneficiary has decreased by 52% while the number of MA-PDs has increased by 143%.
Of the 14 PDPs available to the average beneficiary in 2025, 12 are national PDPs (available in all 34 PDP regions nationwide) (Appendix Table 1). This reduction of two national PDPs from 2024 is the result of one plan sponsor (CVS Health/Aetna) consolidating its 3 PDP offerings in 2024 (SilverScript Choice, Plus, and SmartSaver) to 1 PDP in 2025 (SilverScript Choice). The 2.0 million enrollees in the SilverScript Plus and SmartSaver PDPs (as of June 2024) will be automatically enrolled in SilverScript Choice for 2025 unless they choose a different plan during open enrollment.
A Total of 7 Firms Will Offer 464 Stand-Alone Prescription Drug Plans in 2025, the Lowest Number of PDP Sponsors and Plans Since Part D Started
The number of firms sponsoring stand-alone PDPs is decreasing from 11 firms in 2024 to 7 firms in 2025, the smallest number since the Part D benefit was launched (Figure 2). Due to the market withdrawal of Mutual of Omaha from the PDP market and the termination of Clear Spring Health PDPs by the Centers for Medicare & Medicaid Services (CMS) due to low quality ratings over three years, the 537,000 enrollees in these firms’ PDPs (as of June 2024) will need to select a new Part D plan from a different plan sponsor during the 2024 open enrollment period if they want their Part D coverage to continue in 2025.
A total of 464 PDPs will be offered by these 7 firms in the 34 PDP regions (plus another 10 PDPs in the territories), a decrease of 245 PDPs (-35%) from 2024, and the lowest number of PDPs available in any year since Part D started in 2006.
Despite the reduction in PDP availability overall, beneficiaries in each state will have a choice of multiple plans, ranging from 12 PDPs in 12 states and the District of Columbia to 16 PDPs in California, plus multiple MA-PDs offered at the local level (Figure 3, Appendix Table 2).
Premiums
Stand-Alone Prescription Drug Plan Enrollees Will Pay Higher Monthly Premiums Than Medicare Advantage Drug Plan Enrollees in 2025 – $45 versus $7, on Average
The estimated national average monthly PDP premium is projected to be $45 in 2025, which is six times higher than the average $7 monthly premium for drug coverage in MA-PDs (Figure 4). Between 2024 and 2025, the average monthly premium is increasing by $3 for PDPs but decreasing by $2 for MA-PDs. MA-PD sponsors can use rebate dollars from Medicare payments to lower or eliminate their Part D premiums and offer extra benefits, but there is no equivalent rebate system for PDPs. According to MedPAC, Medicare Advantage monthly rebates per enrollee have more than doubled since 2018, from $95 to $194 in 2024, and of the $194 total monthly rebate amount in 2024, $24 was used to reduce MA-PD Part D premiums.
It is likely that, after accounting for enrollment choices by new enrollees and plan changes by current enrollees, the actual average weighted PDP premium for 2025 will be lower than the estimated weighted average of $45 but still well above the average MA-PD premium.
There are two mechanisms in place that are helping to constrain Part D premium increases for PDPs between 2024 and 2025:
- One is a premium stabilization provision in the Inflation Reduction Act that capped annual growth in the Part D base beneficiary premium at 6% beginning in 2024. (The base beneficiary premium is not the same as the amount that Part D enrollees pay for coverage, and the law did not cap the growth in individual plan premiums to 6%.)
- The other is a new voluntary Part D premium stabilization demonstration for PDPs, which capped premium increases at $35 per month, along with other measures intended to stabilize the PDP market as changes to the Part D benefit take effect in 2025, including a new $2,000 out-of-pocket drug spending cap. MA-PDs are not eligible for this demonstration.
Without these mechanisms in place, it is likely that the average PDP premium increase, and monthly PDP premium amounts in 2025, would have been larger.
Average Monthly Premiums for the 12 National PDPs Are Projected to Range from $3 to $128 in 2025
Actual Part D premiums for 2025 vary widely across plans, as in previous years, and may be increasing by more or less than the national average (or even decreasing). Among the 12 national PDPs, there is a difference of more than $1,500 in average annual premiums between the highest-premium PDP and the lowest-premium PDP. At the high end, the monthly premium for Humana Premier Rx Plan (the 8th largest plan by overall enrollment) will be $128, totaling more than $1,500 annually. At the low end, the monthly premium for Wellcare Value Script (the largest plan) will average just over $3, or $38 annually (Figure 5).
In addition to Humana Premier Rx Plan, two other national PDPs will charge monthly premiums of more than $100 in 2025, on average: Cigna Healthcare Extra Rx, the 12th largest plan ($102), and Wellcare Medicare Rx Value Plus, the 10th largest plan ($107). An estimated 1.3 million people will be enrolled in the 3 national PDPs that charge more than $100 per month in premiums in 2025 if they make no changes to their coverage during open enrollment. Another 2.0 million enrollees will pay an average $95 monthly premium for the AARP Medicare Rx Preferred PDP in 2025, unless they switch plans.
Monthly premiums for several national PDPs vary widely around each plan’s national average (Figure 5). For 6 of the 12 national PDPs, there is a difference of $90 or more across the 34 PDP regions between the plan’s lowest and highest premiums. For example, the monthly premium for the AARP Medicare Rx Saver PDP averages $67 but ranges from $0 to $128 across regions; and for Humana Basic Rx, the average premium is $43 but ranges across regions from $0 to $121. For most of these 12 national plans, monthly premiums are consistently higher in New York and California relative to other regions.
More Than Half of Stand-Alone PDP Enrollees Will See a Reduction or No Change in Their Monthly Premium in 2025 if They Stay in Their Current Plan
Of the 13.1 million Part D PDP enrollees who are responsible for paying the entire premium, which excludes Low-Income Subsidy (LIS) recipients, more than half (54%), or 7.0 million enrollees, will see either a reduction in their monthly premium (41%) or no change (13%) if they stay in their current plan for 2025 (Figure 6). Just under half of Part D stand-alone plan enrollees (46%, or 6.0 million) will see their monthly premium increase in 2025 if they make no change to their coverage during open enrollment for 2025. This is lower than the two-thirds of non-LIS PDP enrollees (66%, or 8.6 million) who were projected to pay higher monthly premiums if they remained in their plan for 2024.
Of the 6 million non-LIS PDP enrollees who will see an increase in their Part D premium if they stay in their current plan, 3.4 million (26% of non-LIS PDP enrollees overall) will see an increase of less than $35 and 2.6 million (20% overall) will see an increase of exactly $35. This is the maximum monthly premium increase allowed for PDPs participating in the new Part D premium stabilization demonstration. According to CMS, virtually all PDP enrollees are in plans sponsored by insurers that opted to participate in the voluntary demonstration.
Medicare Part D enrollees in national PDPs in 2024 will face a range of premium increases and decreases if they make no change to their coverage for 2025 during open enrollment (Figure 7). Notably, enrollees in two of the three PDPs sponsored by CVS Health-Aetna could see substantial premium changes, with the consolidation of SilverScript Plus and SilverScript SmartSaver PDPs into one PDP for 2025 (SilverScript Choice). If they make no changes during open enrollment, the 0.3 million enrollees in SilverScript Plus in 2024 will see their monthly premiums reduced by more than half when they are crosswalked to SilverScript Choice, from $103 to $45. On the other hand, the 1.7 million enrollees in SilverScript SmartSaver will face a substantial increase, from $11 to $44, on average.
Deductibles and Cost Sharing
6 in 10 Medicare Advantage Drug Plan Enrollees Will Be in Plans That Charge a Deductible for Drug Coverage in 2025, up from 1 in 5 in 2024, and the Average Deductible is Increasing Four-Fold for MA-PD Enrollees
Among MA-PD enrollees, 60% (10.9 million) will be a plan that charges a deductible for drug coverage if they stay in their same plan, though only 11% will be in a plan that charges the standard $590 deductible (Figure 8). The share of MA-PD enrollees who will be in plans charging a deductible for drug coverage in 2025 is increasing substantially over 2024 levels, when only 21% of MA-PD enrollees were in a plan charging a drug deductible, including 3% in plans charging the standard deductible amount.
A majority of PDP enrollees (84% or 14.5 million) will be in plan that charges a drug deductible in 2025, including three-fourths (76%) who will be in a plan that charges the standard deductible of $590, assuming no change in enrollment (Figure 8). (These estimates include Part D enrollees receiving Low-Income Subsidies, who do not pay a deductible regardless of whether their plan charges one.)
The average drug deductible charged by MA-PD plans is increasing four-fold from $59 in 2024 to $225 in 2025 (Figure 9). Of the 34 MA-PD plan choices available to the average beneficiary in 2025, 7 will charge the standard $590 deductible, while 13 will charge no deductible. In contrast, only 3 of the 36 MA-PD plan options available to the average beneficiary in 2024 charged the standard deductible and 21 MA-PDs charged no deductible.
For PDP enrollees, the average deductible is increasing from $423 in 2024 to $486 in 2025 – a higher average deductible amount but a smaller increase than for MA-PD enrollees, reflecting the fact that most PDP enrollees were already (and will continue to be) enrolled in plans that charge the standard deductible. Of the 12 national PDPs in 2025, 8 will charge the standard $590 deductible, 2 will charge a lower deductible, and 2 will charge no deductible.
A Larger Share of MA-PD Enrollees Will Face Coinsurance Rather Than Copayments for Preferred Brands and Non-Preferred Drugs in 2025 Compared to 2024
In 2025, as in prior years, Part D enrollees will face much higher cost-sharing amounts for brands and non-preferred drugs (which can include both brands and generics) than for drugs on a generic tier, and a mix of copayments and coinsurance for different formulary tiers. Coinsurance can mean less predictable out-of-pocket costs than copayments. The typical five-tier formulary design in Part D includes tiers for preferred generics, generics, preferred brands, non-preferred drugs, and specialty drugs.
In a notable change for 2025, a larger share of MA-PD enrollees is in plans charging coinsurance rather than flat copayments for preferred brands and non-preferred drugs compared to 2024 levels. The share of MA-PD enrollees facing coinsurance for preferred brands is increasing from 2% in 2024 to 28% in 2025, and the share facing coinsurance for non-preferred drugs is increasing from 11% in 2024 to 57% in 2025.
Among all Part D plans, median standard cost sharing in 2025 for different types of drugs is (Figure 10):
- Generics: $0 for preferred generics and $5 for other generics in both PDPs and MA-PDs.
- Preferred brands: a copayment of $47 in both 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 rather than copayments for preferred brands.
- Non-preferred drugs: For non-preferred drugs, which can include both brands and generics, all PDP enrollees face a median coinsurance of 40%; 57% of MA-PD enrollees face a median coinsurance rate of 42%, and 43% of MA-PD enrollees face a median copayment of $100.
- Specialty drugs: Median coinsurance for specialty drugs is 25% for PDP enrollees and 30% for MA-PD enrollees.
Among the 12 national PDPs, 8 PDPs will charge $0 for preferred generics in 2024, but copays of $45 to $47 or coinsurance of 15% to 25% for preferred brands, and coinsurance ranging from 31% to 50% for non-preferred drugs; 4 out of the 12 national PDPs are charging the maximum 50% coinsurance for non-preferred drugs. Coinsurance for specialty tier drugs ranges from 25% to 33% in these plans, with 8 of the 12 national PDPs charging 25% and 2 charging 33%. (Plans that charge the standard deductible amount of $590 cannot charge more than 25% for specialty tier drugs.)
Low-Income Subsidy Plan Availability
In 2025, a Smaller Number of Stand-Alone PDPs Will Be Premium-Free to Enrollees Receiving the Low-Income Subsidy Than in Any Year Since Part D Started
Through the Part D LIS program, enrollees with low incomes and modest assets are eligible for assistance with Part D plan premiums and cost sharing. Nearly 14 million Part D enrollees are receiving LIS, including 9 million (66%) in MA-PDs and 4.7 million (34%) in PDPs.
In 2025, a smaller number of PDPs will be premium-free benchmark plans – that is, PDPs available for no monthly premium to Medicare Part D enrollees receiving the Low-Income Subsidy (LIS) – than in any year since Part D started, with 90 premium-free benchmark plans, or 19% of all PDPs in 2025 (Figure 11). The number of benchmark plans available in 2025 will vary by region, from one to five (Appendix Table 2).
PDPs offering basic benefits qualify to be benchmark plans if they have premiums below the benchmark amount in a region. The benchmark is calculated as a weighted average of the beneficiary premiums for basic drug coverage offered by both PDPs and MA-PDs in a region (calculated before taking MA rebates into account). (MA-PD premiums are included in this calculation even though MA-PDs do not qualify as benchmark plans.)
On average, LIS beneficiaries will have 2 benchmark plans available to them out of the average 14 PDPs available overall for 2025 – one fewer than the average number of benchmark plan options in 2024. All LIS enrollees can select any plan offered in their area, but if they enroll in a non-benchmark plan, they must pay some portion of their chosen plan’s monthly premium.
One quarter (26%) of all LIS PDP enrollees who are eligible for premium-free Part D coverage (1.1 million LIS enrollees) will pay Part D premiums averaging $30 per month in 2025 unless they switch or are reassigned by CMS to premium-free plans during the open enrollment period.
Juliette Cubanski is with KFF. Anthony Damico is an independent contractor.
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