An initial review of the stand-alone 2025 Medicare Part D prescription drug plans (PDPs) recently released by the Centers for Medicare and Medicaid Services (CMS), shows that, as in past years, Medicare beneficiaries will have fewer stand-alone 2025 Medicare Part D plan options and some current plan members will pay higher 2025 monthly PDP premiums (unless they enroll in a lower-premium 2025 Medicare Part D or Medicare Advantage plan).

Here are highlights of the 2025 stand-alone Medicare Part D PDP landscape from our PDP-Facts.com analysis:

(1) There will be 26% fewer 2025 stand-alone Medicare Part D PDP options.

The total number of stand-alone 2025 Medicare Part D prescription drug plans across the country will decrease 26% to 524 Part D plans from 709 PDPs currently offered in 2024 -- a loss of 185 plans.  The average number of stand-alone 2025 Part D plans offered in each state is decreasing to 16 plans down from 21 PDPs per state in 2024.

California will offer the most stand-alone 2025 Medicare Part D plan choices (18) - down from 23 stand-alone Part D plans offered in 2024.

New York, Hawaii, and Alaska will offer the smallest number of 2025 PDPs at 12 Medicare Part D plans.

Alabama and Tennessee will see the largest PDP decrease – losing eight (8) PDP options in 2025.



(2) The average 2025 stand-alone Medicare Part D premium will increase 4%, but will decrease 5% when weighted by current plan enrollment.

Our preliminary analysis of only the stand-alone 2025 Medicare Part D PDPs indicates a 4% premium increase across all PDPs to an average premium of $61.98*.  When considering current 2024 Medicare Part D plan enrollment, the average weighted 2025 Part D premium will decrease 5% to $39.36*.  The Q1Medicare weighted average premium reflects a similar premium ($40) calculated by CMS.

* Medicare plan average premiums are calculated on a Regional (and not state-by-state) basis where multiple states can include the same Medicare Part D plans.

For the first time since 2006, the Centers for Medicare and Medicaid Services (CMS) did not release the projected Medicare Part D premium for 2025 in late-July or early-August.  Instead, CMS introduced the new Part D Premium Stabilization Demonstration whereby stand-alone Medicare Part D PDPs (not MAPDs) were encouraged to voluntarily lower 2025 premiums with Medicare providing additional financial support against plan losses possibly incurred with the Inflation Reductions Act’s expanded drug plan benefits.


In their September 27, 2024 Fact Sheet, CMS noted:

"Based on the voluntary elections of Part D plan sponsors, approximately 99% of people with Medicare enrolled in a stand-alone Part D plan in 2024 are currently enrolled in a stand-alone Part D plan offered by a plan sponsor that opted into the demonstration for 2025. The voluntary demonstration for stand-alone Part D plans includes three elements: a $15 uniform reduction in the base beneficiary premium, a year-over-year premium increase limit of $35 on a plan’s total Part D premium, and a change to the risk corridors."

CMS estimates that this Demonstration will cost taxpayers about $5 billion (other sources are estimating that the cost of the Premium Stabilization Demonstration may be closer to over $7 billion).

 
(3) As many as 38% of current 2024 Medicare Part D plan members (not considering LIS eligibility) may have increases in 2025 monthly premiums.

When the 2025 Part D PDP premiums are weighted by current 2024 Part D plan enrollment, we estimate that up to 38% of all Medicare Part D beneficiaries currently enrolled in a stand-alone 2024 Medicare Part D plan will see an average premium increase of $20.61 in 2025 -- unless these people change drug coverage to a more affordable 2025 Medicare Part D or Medicare Advantage plan that includes prescription drug coverage (MAPD).


Important Extra Help reminder:  If you are eligible for the Medicare Part D Low-Income Subsidy (LIS) and chose your own Part D plan in the past, you will receive a tan-colored notice from Medicare in early-November, informing you about your upcoming premium increase.


(4) Expect slightly more low-premium 2025 Medicare Part D plan options.

On a positive note, the Q1Medicare analysis of the 2025 PDP landscape found an increase in the number of PDPs with a premium under $25. 

As an example of overall lower premiums, Medicare beneficiaries in Arkansas, Oregon, Washington State, and Wisconsin will find that 50% of all 2025 Medicare Part D plans have premiums under $25. The chart below shows the total number of stand-alone Medicare Part D plans as compared to the number of PDPs across the country with a premium under $25.


However, when viewed state-by-state: twenty-three (23) states will have fewer Part D plans with a premium under $25, twelve (12) states will continue to have the same number of low-premium plans, and sixteen (16) states will have an increase in low-premium PDPs.

As an example of premium increases, Medicare beneficiaries in Indiana and Kentucky will have three (3) fewer 2025 Medicare Part D plans with premiums under $25 as compared to 2024.  However, as we highlight in the next section, a $0 premium 2025 stand-alone Medicare Part D plan is available in all but seven (7) states (and many areas across the country will have access to $0 premium Medicare Advantage plans that include drug coverage (MAPDs)).

The following chart shows the number of low-cost ($25 per month or less) premium Medicare Part D plans as compared to the total number of stand-alone Part D plans offered across the country.

(5)  Lows and Highs:  The lowest premium and highest premium stand-alone 2025 Medicare Part D plans.

In most states the lowest 2025 Part D premium will be the Wellcare Value Script (PDP) with a premium of $0.00.  The lowest PDP premium in 2024 was also the Wellcare Value Script (PDP) in most states with a premium of $0.00 to $0.50.

The 2025 Medicare Part D plan with the lowest monthly premium - and a $0 initial deductible - is the Kansas Blue MedicareRx Plus (PDP) plan, with a premium of $61.60.  The AARP Medicare Rx Preferred from UHC (PDP) is the lowest priced $0 deductible plan in most other states with a premium of about $83 to $115.




(6) Slightly fewer 2025 Medicare Part D plans qualify for the LIS $0 premium..

There will be slightly fewer 2025 Medicare Part D plans qualifying for the state’s Low-Income Subsidy (LIS) $0 benchmark premium across the country and unfortunately, one of these qualifying plans in each state is currently sanctioned by Medicare and cannot accept new enrollments. 

The states offering the smallest selection of $0 premium LIS plans are Alaska, Delaware, Florida, Illinois, Maryland, Nevada, Ohio, South Carolina, Texas, and Washington, DC, each with only two (2) $0 premium LIS plans in 2025.

Wisconsin will offer the largest number of $0 premium LIS plans (6 plans).

Learn more about $0 premium LIS plan availability.



(7)  85% of stand-alone 2025 Medicare Part D plans have an initial deductible.

As was true in 2024, most 2025 Medicare Part D plans will have an initial deductible ranging from $120 to the 2025 standard initial deductible of $590.

In fact, about 85% of all 2025 stand-alone Medicare Part D PDPs will have some initial deductible - with the vast majority of these plans having a $590 initial deductible.

As an example, of the 16 plans available in Florida, only three 2025 stand-alone Medicare Part D plans will have a $0 initial deductible.

On a positive note, almost 44% of 2025 Medicare Part D PDPs with an initial deductible will exclude some low-costing drug tiers from the deductible (meaning possible first-dollar coverage of your low-cost formulary drugs).



(8) 2025 Medicare Part D plans will no longer have a Donut Hole (Coverage Gap).

2025 stand-alone Medicare Part D prescription drug plans and Medicare Advantage plans with drug coverage will no longer have a Coverage Gap (Donut Hole). After spending $2,000 out-of-pocket for formulary Part D drugs, Medicare drug plan members will move directly from the Initial Coverage phase to the Catastrophic Coverage phase where they will have no cost-sharing through the end of the year.


(9) More about the $2,000 out-of-pocket spending limit.

What counts toward the $2,000?

What you actually spend out-of-pocket on Medicare Part D drugs found on your plan’s formulary (and in some cases, what other organizations spend) will count toward the $2,000 maximum prescription drug out-of-pocket spending limit for the entire year (RxMOOP).

For example, as in the past, some third party arrangements that help pay for your Part D drugs will count toward your true out-of-pocket (TrOOP) spending, such as:

• Supplemental commercial health insurance
• Qualified State Pharmacy Assistance Programs (SPAPs)
• Indian Health Service and certain other Native American organizations;
• AIDS Drug Assistance Programs; and
• Legitimate charities

The simplest RxMOOP example using a 2025 Defined Standard (DS) Medicare Part D plan.

In this simple example, assume your Medicare Part D drug plan has a standard $590 deductible and then 25% cost-sharing after the deductible for all formulary Part D drugs (following the Defined Standard (DS) Part D plan) – and we will also assume your first purchase of the year is a $1,000 Tier 3 drug with 25% cost-sharing.

You will first spend $590 to meet the 2025 deductible, and in addition you will pay 25% of the remaining retail balance (($1,000 - $590) * 25% = $102.50). After this first $1,000 drug purchase your total out-of-pocket spending would be $590 + $102.50 = $692.50.

You will then have $2,000 - $692.50 = $1,307.50 remaining to spend before reaching your annual $2,000 spending limit.

If you use the same $1,000 Tier 3 drug each month you will have only the 25% copay or pay $250 a month (since you met the $590 deductible with the first purchase). This means that in just over 6 months, you will meet the $2,000 RxMOOP and have no additional costs for Part D formulary drugs through the remainder of the year.

Important:  You may spend much less than $2,000 to meet your 2025 RxMOOP - depending on your 2025 Part D plan.

There are actually four different types of Medicare Part D drug plans that vary depending on how close the drug plan coverage is to the annual Medicare Defined Standard benefit plan (having a $590 deductible and 25% cost-sharing for all formulary tiers in 2025).  The four types of drug plans you can join are:

• Defined Standard (DS) - used in the simple example above,
• Basic Alternative (BA),
• Actuarial Equivalent (AE), and
• Enhanced Alternative (EA).

Around 75% to 90% of all Part D plan members who are non-LIS eligible are enrolled in an Enhanced Alternative Part D drug plan that has richer benefits than a Defined Standard drug plan.  An Enhanced Alternative drug plan will have a $0 or low deductible and copays for many formulary tiers that are less than the 25% cost-sharing in a Defined Standard plan.

If you are enrolled in an "Enhanced Alternative" (EA) Medicare Part D plan, you will get credit for what you spend on Part D formulary drugs plus what the EA Medicare plan spends on your Part D drugs, up to the amount you would have spent if you were covered by a Defined Standard Part D plan.

A more complex RxMOOP example using a 2025 Enhanced Alternative (EA) Medicare Part D plan.

In this example, assume you enroll into a Medicare Part D plan with a $0 deductible (instead of the standard 2025 deductible of $590) and your plan has a Tier 3 fixed copay of $30 (instead of the standard 25% of retail cost-sharing) - and your first purchase of the year is a $200 Tier 3 drug, you would pay a $30 copay and get TrOOP credit for the $200 retail price.

This is calculated by first determining what the person would have paid if this was a Defined Standard (DS) plan where the $590 deductible was not met (since this is the first purchase of the year).  In the case of a DS plan, the person would pay the full $200 drug price (toward the standard $590 deductible).

Next, the person is granted "the greater of" the EA cost or the DS cost as TrOOP credit: The Enhanced Alternative drug plan copay cost is $30 as compared to Defined Standard drug plan cost of $200.  So in this case, the TrOOP credit is $200 - even though the person only spent $30 out-of-pocket.

After the first $200 drug purchase the person would have ($2,000 - $200) $1,800 remaining before reaching RxMOOP, entering Catastrophic Coverage and having $0 cost-sharing for any formulary Part D drugs through the remainder of the year.


What does NOT count toward your $2,000 spending limit?

-- Your monthly Medicare plan premiums will not count toward the $2,000 RxMOOP. (Important: You need to keep paying your monthly premium even after reaching your $2,000 spending limit or you could lose coverage of formulary drugs.)

-- If you buy a drug that is not covered by the Medicare Part D program, the cost of the non-Part D drug will not count toward the $2,000 RxMOOP.

-- If you buy a non-formulary Part D drug (a Part D drug not covered on your plan’s formulary), the cost will not count toward your $2,000 RxMOOP. (However, you have the right to ask your plan for a formulary exception whereby, if granted, your non-formulary Part D drug will be covered by your Medicare drug plan - and counted toward your $2,000 spending limit).


(10)  You can spread your 2025 Medicare drug spending over the entire year.

Using the simple DS example above, you will also have the option in 2025 to shift the continued cost of the expensive $1,000 drug purchase over the entire year.  So, you would not need to pay a lot of money in the first 6 months and then have $0 cost for the remainder of the year. Instead, you can opt into your plan’s payment smoothing program (called: the "Medicare prescription payment plan" or MPPP or M3P) and the optional-MPPP would then take your $2,000 out-of-pocket spending and spread it across the whole year instead of paying everything in the first 6 to 7 months.

(11)  All 2025 Medicare Part D plans will continue to offer insulin at a 30-day $35 or less copay - and cover ACIP vaccines at a $0 copay.

All 2025 stand-alone Medicare Part D prescription drug plans and Medicare Advantage plans with drug coverage (MAPDs) will continue to offer a 30-day supply of insulins found on the plan’s formulary for a copay of $35 (or less) - through the deductible and Initial coverage phases. In Catastrophic Coverage, all formulary drugs will have a $0 copay.

In addition, all 2025 stand-alone Medicare Part D prescription drug plans and Medicare Advantage plans with drug coverage (MAPDs) will continue to offer $0 cost-sharing for vaccines recommended by the Advisory Committee on Immunization Practices (ACIP), such as Shingles and Pneumonia vaccines.

(12)  Remember, all Medicare plans change each year.

You can review changes in Medicare plan features from 2024 to 2025 using our PDP-Compare.com/2025 or MA-Compare.com/2025.

• Your formulary (drug list) will change year-to-year, see FormularyBrowser.com/2025 (updated as data is available)
  
• The 2025 standard deductible is increasing to $590, see PDP-Finder.com/2025 or MA-Finder.com/2025
• The 2025 Total Out-of-Pocket (TrOOP) threshold (RxMOOP) is $2,000
• There continues to be no beneficiary cost-sharing in the Catastrophic Coverage phase.

Learn More:  Inflation Reduction Act (IRA): Changes to Medicare Part D prescription drug coverage 2023 and beyond.

Need an overview of stand-alone Medicare Part D plans in your area?

If you would like to see an overview of your state’s Medicare Part D plan landscape, please use the following links to our interactive 2025 PDP-Facts: AK AL AR AZ CA CO CT DC DE FL GA HI IA ID IL IN KS KY LA MA MD ME MI MN MO MS MT NC ND NE NH NJ NM NV NY OH OK OR PA RI SC SD TN TX UT VA VT WA WI WV WY National Statistics.

Please note: The above information is from our Medicare Part D plan landscape summaries and based on stand-alone Medicare Part D prescription drug plans  – and does not include the U.S. territories.


Question:  Can we skip the numbers and just read about our state’s Medicare Part D plan changes?

Yes you can. We provide a written summary of how 2024 Medicare Part D plans are changing in 2025 for each state, just look for the "Summarized in Plan Text" link on our PDP-Facts.com state pages.  For example, you can click here to read more about drug plan changes in Arizona, such as:

"Arizona 2025 Medicare Part D premium increases and decreases:
Of the 14 Medicare Part D plans available in Arizona for 2025, 6 plan(s) will lower their premiums and 6 will increase their premiums. Currently, 32.2% of Arizona residents enrolled in a stand-alone Medicare Part D plan are enrolled in one of the 6 plans with a premium increase. The average premium increase for members of these plans will be $22.46 per month. . . ."


What about 2025 Medicare Advantage plans?
The 2025 Medicare Advantage plan landscape summary will be presented in our next newsletter. A number of 2025 Medicare Advantage plans (MA/MAPD / MSA / SNP) may be available in your area and may include prescription drug coverage, along with Medicare Part A (hospitalization coverage), Medicare Part B (out-patient and physician coverage), and additional healthcare (and non-health-related) benefits.

You can use our Medicare Advantage plan finder (MA-Finder.com) for an overview of plans in your area (enter your ZIP to get started).

Q1Medicare®, Q1Rx®, and Q1Group® are registered Service Marks of Q1Group LLC and may not be used for any commercial purposes without the express authorization of Q1Group.

Copyright Q1Group LLC, Saint Augustine, Florida (2025)


Sources include:

CMS Fact Sheet: "CMS Releases 2025 Medicare Part D Bid Information and Announces Premium Stabilization Demonstration"
https://www.cms.gov/newsroom/fact-sheets/cms-releases-2025-medicare-part-d-bid-information-and-  announces-premium-stabilization-demonstration

CMS Press Release, "Medicare Advantage and Medicare Prescription Drug Programs to Remain Stable as CMS Implements Improvements to the Programs in 2025"  https://www.cms.gov/newsroom/press-releases/medicare-advantage-and-medicare-prescription-  drug-programs-remain-stable-cms-implements-improvements

CMS Fact Sheet, "Medicare Advantage and Medicare Prescription Drug Programs to Remain Stable as CMS Implements Improvements to the Programs in 2025"  https://www.cms.gov/newsroom/fact-sheets/medicare-advantage-and-medicare-prescription-drug-  programs-remain-stable-cms-implements-improvements

"Final CY 2025 Part D Redesign Program Instructions Fact Sheet "
https://www.cms.gov/newsroom/fact-sheets/final-cy-2025-part-d-redesign-program-instructions-fact-sheet

"Final CY 2025 Part D Redesign Program Instructions"
https://www.cms.gov/files/document/final-cy-2025-part-d-redesign-program-instructions.pdf

"Prescription Drug Event Record Reporting Instructions for the Implementation of the Inflation Reduction Act for Contract Year 2025"
https://www.hhs.gov/guidance/sites/default/files/hhs-guidance-documents/PDE_Record_Reporting_  Instructions_for_the_Implementation_of_the_IRA_for_Contract_Year_2025_508_G.pdf