As Medicare open enrollment nears, seniors will face difficult choices despite CMS’ rosy assessment

Prescription drug coverage in Medicare will see sweeping changes – for both health plans and for the millions of American seniors they serve – despite a government infusion of billions of dollars to “stabilize” the program as the result of Inflation Reduction Act-related changes to the Medicare benefit design.

The stabilization demonstration will pump an estimated $5 billion into Medicare Part D plans in return for a commitment to hold down premium increases. With pricing and availability for Part D and Medicare Advantage plans now public, the effects of the changes are becoming clear.

Seniors will have fewer Part D choices and may face higher costs. While premiums will, on average, fall slightly in both Medicare Advantage and Medicare Part D as a result of the stabilization funds, patients may nonetheless be burdened.

• Choices in Medicare Part D will be more limited. Seniors will have only 524 plans to choose from, down from 709 in 2024 and the lowest number since the program was established in 2006.
• The average monthly plan premiums touted by CMS won’t describe the experience of all seniors. A KFF analysis, for instance, found that the premiums in the nation’s most popular Part D plan will rise from 40 cents to more than $17.
• New deductibles are likely to hit seniors. STAT reported that “Drug deductibles in Medicare Advantage plans will be 167% higher in 2025,” noting that the increases are a way for health plans to protect their margins.

CMS has done little to address concerns about access. Payers have said consistently that they will experiment with formulary changes and utilization management in light of IRA-related changes, raising fears among physicians and patients that access may become more difficult.

While CMS has acknowledged those worries, the agency has championed transparency rather than concrete guidelines that define what kinds of access barriers are impermissible. As a result, it is hard to assess the CMS claim that coverage will remain robust in the face of major changes, not just in 2025, but also in advance of the availability of price-controlled medicines in 2026.

BIO’s View: The government has worked to frame Medicare prescription drug coverage in 2025 in rosy hues, emphasizing the artificially low premiums enabled by government subsidies and ignoring the possibility of rising deductibles and other costs that will be borne by beneficiaries. This places an additional and unnecessary burden on seniors who must now select carefully among a shrinking set of options to make sure that the low premiums do not hide increasing out-of-pocket costs. And there remains a need to ensure that Medicare drug coverage does not use aggressive utilization management to keep seniors from the medicines that they need.