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Average premiums and benefits for Medicare’s prescription drug program and private Medicare plans are projected to remain stable in 2025, with premiums expected to slightly decrease, according to the Centers for Medicare and Medicaid Services. The stability of premiums is crucial for consumers enrolled in Medicare Advantage plans provided by private insurers and for the health plans themselves, which base their premiums and benefits on reimbursement rates.

The government has been working to align Medicare Advantage prices with those of original Medicare, the public health plan for individuals aged 65 and older. Despite concerns from private health insurers about potential limitations on benefits due to rate cuts, the government’s projections indicate that premiums and benefits will stay steady in 2025. Shares of health insurers had previously experienced a decline following the announcement of the rates in April.

Medicare is the U.S. government’s health insurance program for seniors aged 65 and above, as well as for individuals with disabilities. Medicare Advantage plans, offered by private insurers, deliver additional benefits not covered by regular Medicare, with reimbursement from the government. Additionally, Medicare includes an optional prescription drug coverage program known as Part D.

The Centers for Medicare and Medicaid Services disclosed final 2025 rates for Medicare Advantage payments in April, signaling a 0.2% reduction. This decrease is part of a three-year plan to lower payments to Medicare Advantage plans to better align them with original Medicare.

In 2025, Medicare Advantage plan enrollment is forecasted to increase to 35.7 million beneficiaries, representing 51% of all Medicare recipients, up from 50% in 2024. Average monthly premiums for Medicare Advantage plans are projected to decrease by $1.23, from $18.23 in 2024 to $17 in 2025.

Furthermore, nearly 60% of beneficiaries will have zero-dollar premiums in 2025, while 83% will maintain the same premiums or experience a decrease if they stay with their current plan, with 20% expected to see a drop in premiums. Average Part D premiums are also anticipated to decrease by $7.45 in 2025 to $46.50, down from $53.95 in 2024.

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