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The Centers for Medicare & Medicaid Services (CMS) recently released preliminary technical Medicare Part D bid information for the 2025 contract year to assist Part D plan sponsors in finalizing their Part D and Medicare Advantage (MA) offerings. This preparation is crucial for the upcoming Medicare Open Enrollment period. Additionally, CMS has announced a voluntary demonstration to support the implementation of the redesigned Part D benefit, aiming to improve stability for Medicare beneficiaries in 2025. Preliminary average Part D premiums will be released later this summer, with the finalized 2025 landscape available in mid-to-late September.
The Inflation Reduction Act (IRA), also known as the prescription drug law, introduces several significant improvements to the Part D drug benefit, projected to save Medicare beneficiaries an average of 30% in annual out-of-pocket prescription drug costs by 2025. This will result in a reduction of approximately $7.4 billion in out-of-pocket prescription drug spending for people with Medicare Part D. Key changes include a $2,000 cap on out-of-pocket spending, the elimination of the coverage gap phase ("donut hole"), and the introduction of the Manufacturer Discount Program, which replaces the Coverage Gap Discount Program. The reinsurance payment amount will decrease, with more upfront costs and subsidies shifted to plans.
The base beneficiary premium for 2025 will be $36.78, an increase of $2.08 from 2024. CMS is also conducting a voluntary demonstration to test premium stabilization and revised risk corridors for stand-alone prescription drug plans (PDPs). This demonstration includes a uniform reduction of $15 to the base beneficiary premium, a $35 limit on year-over-year premium increases, and changes to the risk corridors for greater government risk sharing. The demonstration aims to ensure stability and predictability in the Part D market as the IRA changes are implemented.
Overall, these changes shift the government subsidy to Part D plans from reinsurance payments to upfront payments, encouraging better cost management. The national average monthly bid amount for 2025 will be $179.45, reflecting these shifts. CMS aims to provide stability across the Part D market through this demonstration, which is voluntary and open to all stand-alone PDP sponsors.
Source: https://www.cms.gov
View all CMS Inflation Protection Act Press Releases here.
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