📋 Premiums for Medicare Drug Plans Will Be Less Next Year (AARP Article/updated)

[Winter2025VA]

FROM THE ARTICLE.

Premiums for Medicare Drug Plans Will Be Less Next Year, Feds Say.
Open enrollment for Part D and Medicare Advantage plans begins Oct. 15.

By Kimberly Lankford and Tony Pugh, AARP.

➡️[*** Updated September 29, 2025.
Published September 27, 2024.

Key takeaways!

[1] CMS: Average premiums for Part D, Medicare Advantage to fall.
[2] The time to shop is during open enrollment season.
[3] Medicare Plan Finder is debuting new features.
[4] Check costs for your present Part D or Medicare Advantage plan.
[4] Coverage also could change, so assess that, too.

Average monthly premiums for Medicare Part D and Medicare Advantage plans will decrease in 2026, according to the Centers for Medicare & Medicaid Services (CMS).

While benefits and plan choices are expected to be stable next year, Medicare Advantage plans from private insurers project that their enrollment will fall from 34.9 million in 2025 to 34 million in 2026. That’s an expected decline from 50 percent of eligible Medicare beneficiaries to 48 percent.

USE LINK BELOW TO READ THE ARTICLE.

https://www.aarp.org/medicare/drug-plan-premiums/

[CBtoo · Accepted solution]

You and me both. Almost everything I had read indicated premiums (or with drugs tiers, moving from flat copay to percent of drug cost, or switching tiers) would likely be higher. Of course in many cases agent commissions are going down (with some going down to zero so if you use an agent realize that may influence what they recommend) so maybe they are using that money to keep premium increases down/no increases.

I guess we will know for sure when we see what is up on medicare.gov

[CBtoo]

Unfortunately that doesn't appear to be true around here - I sure hope it is true elsewhere! They are the same or higher. And fewer zero dollar tier one drugs (only 3 of the plans here now have them, more did last year), every single plan in my area now does a percent of the drug cost for the higher tiers instead of a flat fee (so with expensive drugs you pay more than what the flat fee used to be). Also one of my generic drugs went up a tier. As far as I can figure out, with the cheapest plan and no changes to my meds, I will be paying about $1000 more next year due to some tier changes, and increased copays. 

Of course one big underlying issue is the out of pocket cap. The money to pay for those people's drugs (about 10% of people used to go through the donut hole and come out the other side, I don't know what percent hit the cap - at least those 10% but probably more) has to come from somewhere. Unfortunately that somewhere is those of us who wouldn't otherwise get anywhere near the cap. 

[cat0w · Accepted solution]

My Medicare Advantage Senior Care plan is increasing by $12 per month for next year. I haven't checked out the Drug cost for next year.

I live in Central Texas and have Baylor Scott & White senior care advantage plan.

[Winter2025VA]

[9/29/25] I am surprised as I had the impression they would increase.

This is GOOD news!!!

[CBtoo · Accepted solution]

You and me both. Almost everything I had read indicated premiums (or with drugs tiers, moving from flat copay to percent of drug cost, or switching tiers) would likely be higher. Of course in many cases agent commissions are going down (with some going down to zero so if you use an agent realize that may influence what they recommend) so maybe they are using that money to keep premium increases down/no increases.

I guess we will know for sure when we see what is up on medicare.gov

[Winter2025VA]

[9/30/25] Hi Carolyn @CBtoo , I have Traditional Medicare with a standalone part D prescription plan with Wellcare. No agent for me. I go to my local LOA. Take care my friend, Nicole. 💛

➡️[*** CAROLYN 

---

@CBtoo wrote:

You and me both. Almost everything I had read indicated premiums (or with drugs tiers, moving from flat copay to percent of drug cost, or switching tiers) would likely be higher. Of course in many cases agent commissions are going down (with some going down to zero so if you use an agent realize that may influence what they recommend) so maybe they are using that money to keep premium increases down/no increases.

I guess we will know for sure when we see what is up on medicare.gov

---

[GailL1]

They are not explaining it well - few people understand how CMS measures rises and falls in drug plan cost from one year to the next.   There is a lot of actuary math involved -  

As simply as I can make it - CMS receives bids from each insurer based on what their plans are expected to  cost them in the next year.  These are for all over the country.  The average of these figures will set a basic plan rate for the following year.  

FROM AI:

The Part D "bid price" is what individual Medicare Part D plan sponsors submit to the CMS each year, representing their expected costs for providing benefits for that year, and is the basis for the National Average Monthly Bid Amount (NAMBA). This bid reflects expected drug costs for beneficiaries with average risk, plus administrative costs and profit, after accounting for federal reinsurance subsidies. The NAMBA is an average of these submitted bids, weighted by the number of plan enrollees, and is used to determine the government's subsidy to plans. 

Once approved, each insurer will take that base rate and develop their planS for the following year.  They will develop plans that are low to high in value.

Each insurer will develop their plans based on a low to high need with the design of each coming from the design of the standard basic plan. Then, they also develop some that may have some special needs features.  

• they would develop a basic plan based on the average bid price for the year and all the changes that will begin.  This plan meets the average requirements for all their plans - a formulary that meets the CMS minimum requirements for coverage, the deductible, an adequate network of pharmacy providers from mail order to local pharmacies that meets the CMS requirements, measures like step therapy, prior authorization, and quantity limits that hold down cost.  Everything that makes this type of plan the average or basic plan.
• from that basic plan, they would develop a low cost plans that have no to low premium, no or low cost lower tier drugs, a deductible, a standard type formulary that covers the required ones but with probably fewer upper tier drugs.
• then they can develop their enhanced plans - more of everything at a greater cost for those that needs these type of plans.  

Remember that each of these will have government subsidies applied to them.  Government subsidizes drugs very similar to Part B Medicare -  In some years, more than others,  in order for the government to absorb some of the sticker shock when there are substantial changes to the program like in 2025. 

So, AARP and even CMS may say that the premiums are lower from one year to the next - and that may be true by using the words that they do,  but the way they get to that statement is very complicated and it was something that only affects the beneficiary in an obscure math-like manner.  

Stand alone Part D plans are usually higher in cost than those within (included with) a Medicare Advantage plan with everything being equal - the way I understand this is that MA insurers can afford to do this because they have a whole plan - medical and drug - that can be used to soften the price.  Whereas a Stand alone Part D plan is just that - it stands alone.

Always buy or choose the best plan for your current needs - 

This is as simple as I can make it and it is as I understand it.