January 2025

Brief: CMS Advance Notice and Draft Part D Redesign

In our brief, we summarize the January 10 releases from the Centers for Medicare and Medicaid Services (CMS). Additionally, we provide background information on changes and include supporting visuals and recommended next steps for labor union or employer plan sponsors and their consultants and brokers.

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Key Takeaways

2026 Advance Notice

  • Medicare Advantage (MA) payments have a projected net increase of 4.33 on average year-over-year
  • CMS will be updating the data years for calculating the MA risk score trend to a two-year period (2022 and 2023)

CY 2026 Draft Part D Redesign

  • The annual deductible will increase to $615 and the annual out-of-pocket (OOP) threshold will increase to $2,100
  • Implementation of the selected drug subsidy program for the 10 drugs selected for the Medicare Price Negotiation program effective 1/1/26
  • Year 2 of 3 for the Premium Stabilization Demonstration project