The Centers for Medicare and Medicaid Services (CMS) recently announced the 2025 proposed payment updates for private insurers in the Medicare Advantage and Part D Programs. CMS said it will be increasing payments to the plans by an average 3.7% (or $16 billion). This increase is coming from expected growth in patient risk scores through the risk adjustment methodology that raises payment rates. Excluding those risk scores, the overall payment benchmark would decrease by less than 0.2%. 

The CMS announcement also details improvements to the structure of the Medicare Part D drug benefit that will result in lower drug costs for millions of people with Medicare.

“Prescription drugs should be affordable. Today, we are continuing to take steps to lower prescription drug costs so that no one must choose between feeding their family and taking their medicine,” said Health and Human Services Secretary Xavier Becerra. “The Biden-Harris Administration is committed to making sure the millions of people who have managed care plans called Medicare Advantage get the best care possible, and that taxpayer dollars are used efficiently.” 

The California Medical Association (CMA) applauds the reduced prescription drug costs for patients in the Medicare Part D program. CMA is also reviewing the proposal for its impact on physicians and patients. 

Comments are due March 1, 2024, and CMS is expected to finalize the rule by April 1, 2024.