The Centers for Medicare & Medicaid Services (CMS) is introducing a voluntary program to stabilize premiums for Medicare Part D stand-alone prescription drug plans (PDPs) in 2025.
This demonstration includes three main components:
- Premium Reduction:
- CMS will apply a $15 reduction to the base premium for all participating stand-alone PDPs.
- If this reduction would make a plan's premium go below $0, it will be adjusted to $0.
- Premium Increase Limit:
- A cap will be set so that any increase in a plan's premium from 2024 to 2025 cannot exceed $35.
- This limit is applied after the $15 reduction.
- Risk Corridor Adjustment:
- CMS will provide greater government risk-sharing for potential plan losses.
Eligibility and Duration:
- All stand-alone PDPs, including Employer Group Waiver Plans (EGWPs), can participate.
- EGWPs are eligible only for the premium reduction, not the other two elements.
- The demonstration will run for one year initially, with the possibility of continuation for at least two more years.
- Plans must inform CMS of their participation by August 5, 2024.
The goal is to increase efficiency and stability in the Part D market during the transition to the redesigned benefits under the Inflation Reduction Act.
