The Centers for Medicare and Medicaid Services (CMS) received 2025 plan proposals from insurance companies in June and July 2024. The proposals reflected changes brought by the Inflation Reduction Act, which includes a $2,000 cap on drug expenses for Medicare beneficiaries. Initial projections suggested that the national average premium for a Part D prescription drug plan could rise to $179 per month in 2025, compared to an average of $35 in 2024.
To address these potential increases, the federal government decided to raise its subsidy to insurance companies from $29.58 per member per month in 2024 to $142.67 in 2025. According to CMS data, this increase has lessened the impact of rising premiums on Part D plans.
“For instance, in Colorado we have seen Aetna consolidate to one Part D plan for 2025 that will carry a $55 a month premium, up from $19 this year. Premiums with most carriers on their stand-alone prescription drug plans did increase. On the Medicare Advantage side, we have seen maximum out of pockets increase, co-pays go up and ancillary benefits like dental, vision, hearing and over-the-counter decrease as a result of the Inflation Reduction Act. These changes are not unique to one carrier, but across the board the insurance companies have had to decide what benefits they can maintain while covering increased costs next year and still remain profitable.”
The adjustments mean that while premiums are increasing for most standalone prescription drug plans—including Aetna’s consolidation to a single plan at a higher monthly rate—the rises are less severe than originally expected due to government intervention.
Medicare Advantage plans are also seeing higher maximum out-of-pocket limits and increased co-pays. Ancillary benefits such as dental, vision, hearing and over-the-counter items are being reduced by many insurers as they manage higher costs linked with legislative changes.
These developments reflect nationwide trends among insurance providers who must balance coverage offerings with profitability amid regulatory shifts affecting Medicare programs.
