In September 2024, the Centers for Medicare & Medicaid Services (CMS) announced that average Part D premiums –which provide prescription drug coverage in retirement – were expected to decrease in 2025. Our analysis of Medicare Part D plans from the three of the largest national carriers tells a different story for all their plans except those offering the lowest level of coverage. The national average premium increase for 2025 across the 357 plans we reviewed is 11% – substantially higher than the Consumer Price Index and other key inflation metrics during this time.

These trends should not be a surprise given the average increase in 2024 premiums of 37%. From 2023 to 2025, prices have increased by just over 50% in dollar terms. Price changes for 2025 plans across states range from a decline of more than $50 per month to an increase of $35, the highest allowed under CMS rules. This tells only part of the story. The other now well-documented trend consistent with the idea of “shrinkflation” is that to manage costs, coverage from plan providers is in some cases being reduced. Deductibles may be increased, some drugs may no longer be covered, and co-pays may be higher.