Changes in Medicare Part D Plan Designs After the Inflation Reduction Act

The Inflation Reduction Act (IRA) included several changes to Medicare Part D prescription drug coverage effective in 2024 and 2025, including a $2000 annual out-of-pocket limit and the shifting of spending from the government to plan sponsors. Federal policies prevented premium increases in 2025, but Part D plans may have responded by increasing deductibles or medication cost sharing.

To measure annual changes in Medicare Part D premiums, deductibles, and cost sharing from 2019 to 2025.

This serial cross-sectional study included 2019 to 2025 data for enrollees in Medicare Part D stand-alone and Medicare Advantage plans.

The primary outcomes were mean monthly premiums and annual deductibles, as well as the proportion of enrollees with coinsurance (vs co-payments) for medications in different formulary tiers. To illustrate changes, mean monthly out-of-pocket costs were estimated for 9 high-spending, nonspecialty, brand-name medications. Results were weighted by plan enrollment and stratified by stand-alone vs Medicare Advantage plans.

For Medicare Advantage plans, mean deductibles decreased from $153 in 2019 to $66 in 2024, then increased to $228 in 2025. The proportion of Medicare Advantage beneficiaries with coinsurance for preferred brand-name drugs ranged from 0.8% to 2.5% from 2019 to 2024 and increased to 27.7% in 2025. For 9 high-spending, nonspecialty, brand-name drugs, mean monthly out-of-pocket costs ranged from $46 to $55 from 2019 to 2024 and increased to $73 in 2025. In stand-alone plans, changes were observed before and after implementation of the IRA: mean deductibles increased steadily from $295 in 2019 to $490 in 2025, and the proportion of beneficiaries with coinsurance for preferred brand-name drugs increased from 21.9% to 84.0%. Cost sharing for the 9 drugs increased steadily from $62 in 2019 to $108 in 2025 in stand-alone plans. Premiums for both plan types decreased throughout the study period.

This cross-sectional study demonstrates that as the IRA's changes to Part D were implemented in 2024 to 2025, there were concurrent changes in plan design that may increase cost sharing, particularly for beneficiaries who do not spend more than the $2000 annual out-of-pocket limit and for those in Medicare Advantage plans. Additional policies may be needed to address cost sharing and ensure the affordability of essential medications covered by Medicare Part D.