- 1,000
The average monthly premium for Part D coverage is nearly 5 times larger for PDPs than for MA-PDs
On average, PDP enrollees pay substantially more each month for their Part D drug coverage than enrollees in Medicare Advantage drug plans. The average monthly PDP premium is $43, nearly 5 times higher than the $9 average monthly premium for drug coverage in MA-PDs (weighted by enrollment) (Figure 5; Table 2). (The total average premium for MA-PDs, including all Medicare-covered benefits, is $14 per month in 2024.)The difference between average monthly premiums for drug coverage offered by PDPs and MA-PDs has been growing larger, with the PDP average rising and the MA-PD average falling. The average premium for drug coverage in MA-PDs is heavily weighted by zero-premium plans because MA-PD sponsors can use rebate dollars from Medicare payments to lower or eliminate their Part D premiums. Rebates to Medicare Advantage plans have more than doubled since 2018 and now exceed $2,000 per year per beneficiary.
The $43 weighted average PDP premium, based on current enrollment after the end of the open enrollment season for 2024, is lower than the estimated $48 monthly PDP premium for 2024, which was based on enrollment in June 2023 and did not account for plan switching by current enrollees or plan choices by new enrollees during the open enrollment period. Taking into account plan switching and new enrollment into lower premium plans resulted in the lower enrollment-weighted average monthly premium for 2024. Rather than an estimated increase of 21% over the 2023 average premium (from $40 to $48), the actual increase is 5% (from $40 to $43).
[EXTERNAL LINK] - Key Facts About Medicare Part D Enrollment, Premiums, and Cost Sharing in 2024 | KFF
