Medicare Advantage plans, which cover more than half of all Medicare beneficiaries, will see stable premiums and benefits in 2025, according to the Centers for Medicare and Medicaid Services (CMS). On Friday, federal officials announced that the average monthly premium for Medicare Advantage plans will fall slightly to $17.00, down from $18.23 in 2024, despite previous warnings from insurers about potential benefit cuts.
Medicare Advantage Benefits and Premiums Stay Consistent
CMS confirmed that enrollees in Medicare Advantage plans can expect stable access to coverage and benefits in 2025. Despite concerns raised by insurers, more than 80% of Medicare Advantage enrollees will either maintain the same monthly premium or see a decrease next year if they stay with their current plan. The agency also highlighted that the average county will offer seniors 34 Medicare Advantage plans, ensuring a broad range of choices.
Medicare Advantage plans will receive an average of $210 per member in monthly rebates from the federal government, a $1 increase from 2024. These rebates are required to be used to enhance benefits, reduce premiums, or lower cost-sharing for enrollees. Nearly all Medicare Advantage plans will continue offering popular supplemental benefits such as dental, vision, and hearing coverage.
Impact of Rising Costs and Insurer Responses
Health insurance companies have voiced concerns that rising medical costs will force them to scale back offerings or exit certain markets. Humana, for example, recently announced that it would reduce its Medicare Advantage offerings, affecting 560,000 beneficiaries. Similarly, Centene’s WellCare subsidiary plans to exit the Medicare Advantage market in six states, and CVS Health’s Aetna indicated it may reduce its Medicare Advantage membership by up to 10%.
However, CMS remains confident that the overall landscape of Medicare Advantage will remain favorable for beneficiaries, as enrollees will continue to benefit from supplemental offerings and stable premiums. CMS data shows that beneficiaries enrolled in combined Medicare Advantage and prescription drug plans will enjoy average monthly premiums of $13.50, down from $15.50 this year.
Prescription Drug Costs Capped for 2025
In addition to stable Medicare Advantage premiums, all Medicare beneficiaries will see out-of-pocket prescription drug costs capped at $2,000 starting in 2025. This cap marks a significant change in Medicare’s approach to limiting prescription drug expenses, ensuring that beneficiaries are shielded from excessive drug costs. Meanwhile, the average monthly premium for standalone prescription drug plans will also decrease, dropping to $40, a slight reduction from $41.63 in 2024.
Most standalone drug plans are also participating in a CMS initiative aimed at reducing plan premiums by $15, which will further ease financial burdens on Medicare beneficiaries.
As Medicare Advantage continues to be a popular choice among seniors, the outlook for 2025 remains stable, with minor reductions in premiums and broad access to supplemental benefits. While some insurers are scaling back offerings due to rising healthcare costs, the overall environment for Medicare Advantage beneficiaries remains favorable. CMS’s continued commitment to keeping costs low while maintaining access to vital services, such as dental, vision, and hearing, ensures that seniors can continue to rely on these plans for comprehensive healthcare coverage.
