How are 2025 Part D base premiums determined and do they vary by plan?
Executive summary
The Centers for Medicare & Medicaid Services (CMS) establishes a national “base beneficiary premium” for Medicare Part D — $36.78 for 2025 — which serves as a reference point in Part D calculations, but individual monthly premiums charged to enrollees are set by private plan sponsors and therefore vary by plan [1] [2] [3]. CMS also layers on policy tools — the Inflation Reduction Act cap on base growth, income-related surcharges, and a voluntary Premium Stabilization Demonstration for standalone PDPs — that affect the published base and the degree of year-to-year plan variation [4] [5] [6].
1. How CMS determines the national base beneficiary premium and related benchmarks
CMS computes a national average monthly bid and a national “base beneficiary premium” that serve as statutory benchmarks for Part D administration; for 2025 CMS published a national average monthly bid amount of $179.45 and a base beneficiary premium of $36.78 [7] [1]. Those figures reflect CMS’s review of plan bids and its payment methodology adjustments intended to reflect expected plan liability under the redesigned Part D benefit created by the Inflation Reduction Act (IRA) [8] [4]. The base premium is also the number used in national calculations such as the Part D late-enrollment penalty formula, which multiplies months of uncovered eligibility by 1% of the national base [2].
2. Why individual Part D plan premiums vary even though there’s a national base
Private insurers — either standalone prescription drug plans (PDPs) or Medicare Advantage plans with drug coverage (MA‑PDs) — submit bids and then set plan-specific premiums that can be above, at, or below the national base depending on the plan’s negotiated drug prices, expected enrollee costs, administrative costs, and supplemental benefits [3] [8]. CMS uses the national base to calculate a plan’s “basic” premium component, but plans can add a supplemental premium and design differing cost-sharing and formularies, so actual enrollee premiums vary widely across plans and regions [6] [3]. Historically MA‑PDs have tended to show lower premiums on average than standalone PDPs; CMS and analysts expected continued variation in 2025 as the redesigned benefit altered plan liabilities [4].
3. The role of income-related surcharges (IRMAA) and how beneficiaries pay
Separate from plan-set premiums, high-income beneficiaries pay income-related monthly adjustment amounts (IRMAA) for Part D based on modified adjusted gross income from tax returns two years prior; those IRMAA surcharges were updated for 2025 and apply in addition to whatever premium a plan charges [5] [9]. CMS notes roughly two-thirds of beneficiaries pay premiums directly to their plan while the remainder have premiums and any Part D IRMAA deducted from Social Security benefits, but the IRMAA collection mechanism does not change whether plan premiums themselves differ by sponsor [5].
4. 2025 policy changes that affected the base and plan-level variation
To blunt disruptive premium swings as the IRA’s benefit redesign took effect, CMS implemented a voluntary Part D Premium Stabilization Demonstration in 2025 that (for participating standalone PDPs) applies a uniform $15 reduction to the base beneficiary premium used to calculate plan-specific basic premiums and also imposes a year‑over‑year cap on total plan premium increases of $35 [6]. The IRA itself also capped growth in the base beneficiary premium to no more than 6% above the prior year, a statutory constraint intended to restrain the national base even if plan-level premiums could move differently [4]. CMS reported that nearly all PDP enrollees in 2024 were in plans whose sponsors opted into the demonstration for 2025, underscoring the demonstration’s practical reach in that market [7] [6].
5. What beneficiaries should understand in plain terms
The $36.78 figure is an administrative anchor — visible in national metrics and penalties — but it is not the bill a person will necessarily pay each month; individual plan premiums differ because private plans set their own prices above or below the base, and high-income enrollees will owe IRMAA surcharges on top of whatever plan premiums they face [1] [3] [9]. CMS interventions in 2025 — the stabilization demonstration and the IRA cap on base growth — were designed to limit sudden swings at the national and plan level, but variability across plans and regions remains an expected feature of the Part D market [6] [4]. Reporting and plan finder tools list plan-level premiums and the national benchmarks; CMS publications and the Medicare plan finder are the authoritative sources for the finalized plan premiums announced each fall [8] [7].