Note: This factsheet was updated on October 08, 2024 to incorporate new data on HPV vaccine utilization.The human papillomavirus (HPV) vaccine is the first and only vaccination that helps protect individuals from getting several cancers that are associated with different HPV strains. The vaccine protects young people against infection from certain strains of HPV, the most common sexually transmitted infection (STI) in the United States. Since HPV vaccines were first introduced in the U.S. in 2006, there have been changes in the range of protection they offer and the dosing regimen. The vaccines were originally recommended only for girls and young women and were subsequently broadened to include boys, young men, and people of all genders. This factsheet discusses HPV and related cancers, use of the HPV vaccines for both females and males, and insurance coverage and access to the vaccines.

HPV and Cancer

HPV is the most common STI in the U.S. and is often acquired soon after initiating sexual activity. Approximately 42.5 million Americans are infected with HPV and there are at least 13 million new infections annually. There are more than 200 known strains of HPV, and while most cases of HPV infection usually resolve on their own, persistent infection with high-risk strains can cause cancer. HPV-related cancers have increased significantly in the past two decades — between 2015 and 2019, over 47,000 people in the United States developed an HPV-related cancer compared to 30,000 in 1999. While HPV-related cervical and vaginal cancer rates have decreased since 1999, rates for oropharyngeal and anal HPV-related cancers have increased.

Cervical Cancer

HPV is related to over 90% of cervical cancer cases, with two strains (16 and 18) responsible for approximat­­ely 66% of cervical cancer cases worldwide. In the U.S., it is estimated that 13,820 new cervical cancer cases will be diagnosed in 2024. While cervical cancer is usually treatable, especially when detected early, approximately 4,360 deaths from cervical cancer will occur in 2024. Current guidelines by the U.S. Preventive Services Task Force (USPSTF) and Women’s Preventive Services Initiative (WPSI) recommend that most women ages 21 to 65 receive Pap test once every three years and recommends that women over 30 get a high-risk HPV test every 5 years.

Despite widespread availability of Pap testing, racial disparities in cervical cancer incidence and mortality rates persist in the U.S. For example, although Hispanic women have the highest incidence rate of cervical cancer, their cervical cancer mortality rates are comparable to the national mortality rate. Black women, on the other hand, have the third highest incidence rate of cervical cancer, yet have the highest mortality rates of the disease (Figure 1). One notable paradox is that Black women also have the highest rates of recent Pap testing. In 2022, 64% of Black women ages 18 to 64 reported having received a Pap smear in the past two years compared to 59% of White women, 60% of Hispanic women, and 57% of Asian women. Lower rates in follow-up treatment after an abnormal pap smear, differences in treatment options, diagnosis at later stages of disease progression, and distrust in the medical system may account for some of the disproportionate impact of cervical cancer on Black women.

More than half of cervical cancer cases are detected in women who have never been screened or have not been screened as frequently as recommended in guidelines. Higher shares of Hispanic and Black women have never been screened for cervical cancer compared to White women (14% and 12% percent, respectively, compared to 6% of White women). Additionally, Hispanic women have one of the highest uninsured rates in the country (20%) compared to 6% of White women and 10% of Black women. Compared to women with insurance, uninsured women and women with Medicaid were less likely to access preventive health services such as Pap tests in 2022.

Cervical cancer screening rates declined during the early part of the COVID-19 pandemic. While cervical cancer screening rates have rebounded to a degree, they have not returned to pre-pandemic levels. A KFF survey of OBGYNs found that 71% of physicians reported that it was difficult to provide preventive reproductive health care services, like STI and cervical cancer screenings, during the COVID-19 pandemic. In that same survey, 38% of OBGYNs said they were somewhat or very worried that their patients who experienced delays in following up on abnormal pap smears because of the pandemic would face negative health care consequences.

In May 2024, the U.S. Food and Drug Administration (FDA) approved the use of HPV self-collection methods in healthcare settings, though these methods are not yet widely available. Self-collection will allow women to collect a vaginal swab sample within a healthcare facility without having to see a gynecologist. However, they would not replace screening with pap tests or traditional HPV testing; rather, they would provide patients with a more private, comfortable, and convenient option to test for cervical cancer as well as improve earlier detection of the disease. Currently, the National Cancer Institute is conducting a study to gauge the usability, acceptability, and effectiveness of self-collection methods throughout the United States.

Oropharyngeal and Anal Cancers

Approximately 20,805 cases of oropharyngeal (throat) cancer occur annually in the U.S, most of which (70%) are probably caused by HPV. Oropharyngeal cancers are the most common HPV-associated cancer among men and are more common among men than women (Figure 2). However, it’s important to note that anyone who heavily uses both tobacco and alcohol is at much higher risk of developing these cancers. Research suggests that HPV vaccines can help protect against throat cancer, since many are associated with HPV 16 and 18, two of the strains that the vaccine protects against.

HPV is also responsible for the majority (91%) of the over 7,500 annual cases of anal cancer in the U.S. Most cases of anal cancer are among women (Figure 2), but men who have sex with men are also at higher risk of HPV strains 16 and 18. Additional risk factors for anal cancer include a history of cervical cancer and having a suppressed immune system. Like oropharyngeal cancer, there has been an increase in the rate of anal cancers in the past 15 years.

HPV Vaccines

Since 2016, Gardasil®9 is the only HPV vaccine available in the U.S. The HPV vaccine, as well as all other routine vaccines, may be administered on the same day as any of the COVID-19 vaccines.

The FDA approved first-generation Gardasil®—produced by Merck—in 2006, which prevented infection of four strains of HPV: 6, 11, 16, and 18. In December 2014, Gardasil®9 was approved by the FDA. This vaccine protects against 9 strains of HPV: the four strains approved in the previous Gardasil vaccine, as well as 31, 33, 45, 52, and 58. These strains are associated with the majority of cervical cancer, anal cancer, and throat cancer cases as well as most genital warts cases and some other HPV-associated ano-genital diseases. The vaccine was initially approved for cervical cancer prevention, but in 2020 the FDA broadened its approval to include the prevention of oropharyngeal cancer and other head and neck cancers.

Gardasil®9 has been approved by the FDA for use in individuals ages nine to 45 years (Table 1). The federal Advisory Committee on Immunization Practices (ACIP)—an independent body of experts that issues immunization recommendations for the U.S. population—recommends that all girls and boys get vaccinated at age 11 or 12, or as early as age nine, and that adolescents and young adults ages 13 to 26 be given a “catch-up” vaccination series. ACIP recommends a two-dose series over 6 to 12 months for individuals who received their first vaccine at ages nine to 14. Teens and young adults who initiate vaccination at age 15 or older should receive three doses over six months. These recommendations are designed to promote immunization when the vaccine is most effective – before the initiation of sexual activity. Those already infected with HPV can also benefit from the vaccine because it can prevent infection against HPV strains they may not have contracted, but the vaccine does not treat existing HPV infections.

While the FDA expanded it’s approval of the HPV vaccine to include adults ages 27 to 45, ACIP does not recommend routine catch-up vaccinations for all adults in this age group. ACIP recommends that adults ages 27 to 45 who have not been properly vaccinated and who may be at risk for new HPV infections consult with a medical professional about receiving the vaccine.

Current global research suggests Gardasil®9 protection is long-lasting: more than 10 years of follow-up data in both boys and girls indicate the vaccines are still effective and there is no evidence of waning protection, although it is still unknown if recipients will need a booster in the future. Other HPV vaccines show similar effectiveness. In Scotland, recipients of the bivalent HPV vaccine Cervarix®—which protects against HPV 16 and 18—who became fully vaccinated against HPV at age 12 or 13 have had no cases of cervical cancer since the vaccine program started in 2008. Additionally, new data from the American Society of Clinical Oncology shows that the vaccine reduced the risk of all HPV-associated cancers—including oropharyngeal, head, and neck cancers—by 50% in men.

Outreach and Utilization

HPV vaccination rates vary by state, from a low of 39% of adolescents being HPV UTD in Mississippi to a high of 85% in Rhode Island (Figure 3). Some states, such as Hawaii, Rhode Island, Virginia, and D.C., have laws that require HPV vaccination for school entry. In California, the Cancer Prevention Act requires schools to notify families of 6^th grade children about HPV vaccine recommendations and advise them to follow guidelines but does not require them to adhere to them for school entry. Vaccine exemptions due to religious or personal beliefs are permitted in most states.

Some people begin the vaccine series but do not complete it. In 2023, 78.5% of adolescent girls and 75% of boys received at least one dose of the HPV vaccine. Trends in vaccination coverage show that overall HPV vaccination initiation slightly declined in 2022 for the first time since 2013 among some subgroups of adolescents aged 13-17. While vaccine initiation among adolescents overall remained steady, initiation rates in 2022 decreased among adolescents who were uninsured or covered by Medicaid (Figure 4).

Data from the Vaccines for Children Program (VFC), a federally-funded program that covers the cost of ACIP-recommended vaccines for eligible populations through age 18, show that, compared to 2019, VFC provider orders for the HPV vaccine decreased from 2020 to 2022. Research suggests that the COVID-19 pandemic disrupted the delivery and administration of the HPV vaccine, as well as parents’ and patients’ abilities to attend well-child visits before vaccines became overdue, resulting in lower rates of vaccination.

Vaccine hesitancy during this time may have also contributed to the decline in HPV vaccine initiation. Prior to the COVID-19 pandemic, parents’ top reasons for not vaccinating their children were perceptions of safety concerns and the belief that the vaccine was not needed. Since the COVID-19 pandemic began, some providers have observed an increase in vaccine hesitancy or refusal in parents of adolescents due to difficulties caused by COVID-19 or mistrust in vaccines.

Compared to 2022, national HPV UTD rates among adolescents aged 13-17 remained steady in 2023, with just over 60% being up-to-date. HPV vaccination rates among teen boys are lower than for girls (59% vs. 64% HPV UTD in 2023), but they have been rapidly rising since 2016.  Although HPV UTD rates in adolescents overall has remained steady, recent data shows a decline in vaccination rates by birth year. Compared to 13-year-olds born in 2007, HPV UTD coverage in 13-year-olds born in 2010 decreased by 7.1% overall and 10.3% among those eligible for the VFC program. The Centers for Disease Control and Prevention (CDC) suggest that additional outreach focused on populations that experienced declines in vaccination is needed to further understand the impact of the COVID-19 pandemic on access to and initiation of recommended vaccines.

Vaccine Financing

There are multiple sources of private and public financing that assure that nearly all children and young adults in the U.S. have coverage for the HPV vaccine. Many of the financing entities base their coverage on ACIP recommendations.

The Affordable Care Act (ACA) requires public and private insurance plans to cover a range of recommended preventive services and ACIP recommended immunizations without consumer cost-sharing. Plans must cover the full charge for the HPV vaccine, as well as pap tests and HPV testing for women.

Public Financing

Vaccines for Children — Through the VFC program, the CDC purchases vaccines at a discounted rate and distributes them to participating healthcare providers. All children are eligible through age 18 if they are uninsured, underinsured, Medicaid-eligible, Medicaid-enrolled, or American Indian or Alaska Native.

Medicaid — Medicaid covers ACIP recommended vaccines for enrolled individuals under age 21 through the Early and Periodic Screening Diagnosis and Treatment program (EPSDT). Adults 21 and older who are insured through Medicaid are covered for approved adult ACIP-recommended vaccinations without cost-sharing.

Public Health Service Act — Section 317 of the Public Health Service Act provides grants to states and local agencies to help extend the availability of vaccines to uninsured adults in the United States. These are often directed towards meeting the needs of priority populations, such as underinsured children and uninsured adults.

Merck Vaccine Patient Assistance Program — Merck has established assistance programs to provide free vaccines in the United States. To qualify, individuals must be aged 19 or older, uninsured, and low-income.

Children’s Health Insurance Program (CHIP) — Children who qualify for CHIP are part of families whose incomes are too high to qualify for Medicaid but too low to afford private insurance. Each state has its own set of specific qualifications for CHIP. The program is managed by the states and is jointly funded by the states and the federal government. CHIP programs that are separate from the Medicaid Expansion must cover ACIP-recommended vaccines for beneficiaries since they are not eligible for coverage under the federal VFC.

The HPV vaccine has been available in the U.S. for nearly two decades and uptake has risen over that time, though more recently since the COVID-19 pandemic there have been notable declines in vaccination rates. Since its introduction in 2006, the vaccine covers more strains of HPV, its use has been extended to males, the dosage has dropped from three to two shots, and the cost is fully covered by private insurance and public programs. With these improvements, the vaccine holds the promise to safely and dramatically reduce the rates of and prevent many kinds of cancers that have long been responsible for the deaths of women and men.

The Senate Committee on Appropriations approved its FY 2025 Labor, Health and Human Services, Education, and Related Agencies (Labor HHS) appropriations bill, accompanying report, and amendments on August 1, 2024. The Labor HHS appropriations bill includes funding for U.S. global health programs provided to the Centers for Disease Control and Prevention (CDC) and funding for global health research activities provided to the National Institutes of Health (NIH). Total global health funding at CDC and NIH through the Labor HHS bill is not yet known, as funding for some programs at NIH is determined at the agency level rather than specified by Congress in annual appropriations bills. Funding for global health programs at CDC totals $698 million, which is $4.8 million (1%) above the FY24 enacted and President’s FY25 request level ($693 million) and $134 million (24%) above the House level ($564 million). Funding for parasitic diseases and global public health protection at CDC increased while all other program areas, including the Fogarty International Center at NIH, remained flat compared to the FY24 enacted amounts. See the table below for additional detail on global health funding. See other budget summaries and the KFF budget tracker for details on historical annual appropriations for global health programs.

The Senate Committee on Appropriations approved the FY 2025 State, Foreign Operations, and Related Programs (SFOPs) appropriations bill, accompanying report, and amendments on July 25, 2024. The SFOPs bill includes funding for U.S. global health programs at the State Department and the U.S. Agency for International Development (USAID). The SFOPs bill includes funding for U.S. global health programs at the State Department and the U.S. Agency for International Development (USAID). Funding for these programs, through the Global Health Programs (GHP) account, which represents the bulk of global health assistance, totaled $9.7 billion, a decrease of $886 million (-8%) below the FY 2024 enacted level. All of the decrease is due to reduced funding in the bill for the Global Fund to Fight AIDS, Tuberculosis and Malaria (Global Fund), though the accompanying report notes that the decline is “a result of the statutory cap on U.S. contributions related to other donor funds.” Funding for maternal and child health, UNICEF, nutrition, family planning and reproductive health (FP/RH), global health security, the Health Reserve Fund, and Global Health Worker Initiative increased compared to FY 2024 enacted levels; all other global health areas remained flat. The bill also included an extension of PEPFAR from March 25, 2025 to September 30, 2026. See the table below for additional detail on FY 2025 Senate levels compared to the FY 2024 Omnibus as well as the FY 2025 President’s Request and FY 2025 House levels. See other budget summaries and the KFF budget tracker for details on historical annual appropriations for global health programs.

ACA Marketplace insurers are proposing a median premium increase of 7% for 2025, similar to the 6% premium increase filed for 2024, according to a new KFF analysis of the preliminary rate filings. Insurers’ proposed rate changes – most of which fall between 2% and 10% – may change during the review process.

Although the vast majority of Marketplace enrollees receive subsidies and are not expected to face these added costs, premium increases generally result in higher federal spending on subsidies. The justifications insurers provide for these premium changes also shed light on what is driving health spending more broadly.

Insurers cite growing health care prices – particularly for hospital care – as a key driver of premium growth in 2025, as well as growing use of weight loss and other specialty drugs, according to KFF’s examination of publicly-available documents.

This year, increases in the prices insurers are paying for medical care tend to affect premiums more than growth in the utilization of care. Insurers say workforce shortages and hospital market consolidation, which can put upward pressure on health care costs and prices, are increasing 2025 health insurance premiums.

Meanwhile, growing demand for Ozempic, Wegovy, and other costly GLP-1 drugs, which are used to treat diabetes and obesity, is increasing prescription drug spending.

The full analysis and other data on health costs are available on the Peterson-KFF Health System Tracker, an online information hub dedicated to monitoring and assessing the performance of the U.S. health system.

This updated analysis of insurers’ preliminary rate filings shows that ACA Marketplace insurers are requesting a median premium increase of 7% for 2025, similar to the 6% premium increase filed for 2024. Insurers cite growing health care prices – particularly for hospital care – as a key driver of premium growth in 2025, as well as growing use of weight loss and other specialty drugs, according to KFF’s examination of publicly-available documents.

Insurers’ proposed rate changes – most of which fall between 2% and 10% – may change during the review process. Although the vast majority of Marketplace enrollees receive subsidies and are not expected to face these added costs, premium increases generally result in higher federal spending on subsidies.

The analysis can be found on the Peterson-KFF Health System Tracker, an information hub dedicated to monitoring and assessing the performance of the U.S. health system.

An updated issue brief looks at the drivers of health spending in the U.S. and key differences between the U.S. and other large, wealthy nations. The analysis finds that people in the U.S. spent $5,683 more per person on health care compared to those in similarly large and wealthy countries. Almost 80% of the difference in spending came from inpatient and outpatient care costs. Many retail prescription drugs also cost more in the U.S. In 2021, the U.S. spent $1,635 per capita on prescription drugs, including over-the counter drugs, while comparable countries spent $944 on average

The analysis is available on the Peterson-KFF Health System Tracker, an online information hub dedicated to monitoring and assessing the performance of the U.S. health system.

A new KFF analysis shows that the share of young adults (ages 18 to 26) receiving mental health treatment rose by 45% between 2019 and 2022 – a steeper increase than in any other age group.

More than 1 in 4 young adults (26%) received counseling and/or medication for mental health concerns in 2022, up from 18% three years earlier, according to the analysis of the most up-to-date National Health Interview Survey (NHIS) data available.  That was a higher share than among adults in any other age group in 2022.

While other age groups experienced an increase in the share receiving treatment over the period as well, the increase was smaller: 29% for adults ages 27-50, 13% for adults ages 51-64, and 1% for adults 65 and above.

The spike in utilization among young adults roughly coincided with the onset and most challenging years of the COVID-19 pandemic – when school and work were significantly disrupted – although utilization of mental health services had been increasing even before the pandemic. Even so, research shows that among young adults with mental health conditions, many still report not receiving treatment.

Overall, 23% of adults received mental health treatment in 2022, up from 19% in 2019, the analysis showed. Specifically, the share of all adults saying they received mental health counseling rose from 10% in 2019 to 13% in 2022. At the same time, the share of adults reporting they took prescription medication for mental health conditions increased from 16% to 19%.

The analysis shows that women were nearly twice as likely as men to report receiving mental health treatment in the past year (29% vs. 17% in 2022). Other research suggests that men may be less likely to seek mental health care than women, and they are more likely to be uninsured and less likely to report a usual source of health care.

Other key takeaways include:

• Across racial and ethnic groups, the share of people who said they received mental health treatment in 2022 was highest among White adults (28%) and lowest among Asian adults (9%). That compared to 16% each among Hispanic adults and Black adults.
• Adults with insurance coverage are more likely to report receiving mental health care in the past year than adults without insurance coverage (25% vs. 11% in 2022).

Many people in the United States experience mental health conditions, which raises questions about mental health service utilization patterns and what barriers exist with connecting people to services. Prior research suggests that mental health service utilization increased over time. This analysis explores more recent data, from 2019 to 2022, to understand the latest trends in utilization of mental health services and how it differs by demographics and insured status. In this analysis, receipt of mental health care is measured as the share of people who say they received mental health counseling and/or prescription medication for mental health concerns in the last year. Estimates shown are KFF analyses of National Health Interview Survey (NHIS) data among adults in the U.S. from 2019 to 2022.

In 2022, 23% of adults received mental health treatment, up from 19% in 2019 (Figure 1). Specifically, the share of adults saying they received mental health counseling in the past year increased from 10% in 2019 to 13% in 2022. Similarly, the share of adults reporting they took prescription medication for mental health conditions increased from 16% to 19% during the same period. Receipt of prescription medication remained consistently higher than counseling (19% vs. 13%, respectively, in 2022).

Compared to older adults, young adults (ages 18-26) were more likely to receive mental health treatment and experienced the highest increase in receipt of treatment over time. In 2022, 26% of young adults reported receiving counseling and/or prescription medications for mental health conditions in the past year, representing a significantly higher share compared to all other adults (ages 27 and above) (Figure 2).

Young adults also experienced the largest percent increase in the share of adults receiving mental health treatment from 2019 to 2022 (45%), followed by adults ages 27-50 (29%), 51-64 (13%), and 65 and above (1%) (Figure 2). Although receipt of mental health services has increased among young adults in recent years, other KFF analyses found that leading up to the pandemic, many young adults with mental health conditions did not receive treatment. The lack of treatment among this population may be linked to costs, transitioning from pediatric to adult health care, and difficulties accessing mental health services in college settings.

Women are nearly twice as likely to report receiving mental health treatment in the past year compared to men. In 2022, 29% of women reported receiving mental health services, compared to 17% of men (Figure 3). Research suggests men may be less likely to seek mental health care than women. Men are also more likely to be uninsured and less likely to report a usual source of health care. Separately, women are more likely than men to report experiencing mental health disorders, including serious mental illness.

Across racial and ethnic groups, past year receipt of mental health treatment was highest among White adults and lowest among Asian adults. In 2022, 28% of White adults reported receiving counseling and/or prescription medication for mental health conditions in the past year, compared to 16% of Hispanic and Black adults and 9% of Asian adults. A recent KFF poll found that, compared to their White peers, Hispanic, Black, and Asian adults disproportionately report challenges with mental health care utilization, including finding a provider who can understand their background and experiences, lack of information, and stigma or embarrassment. Additionally, the lack of a diverse mental health care workforce, absence of culturally informed treatment options, and stereotypes and discrimination associated with poor mental health may also contribute to limited mental health treatment among Black and Asian adults. Specifically among Asian people, cultural attitudes towards mental health are a factor that may lead to both lower reporting of mental health concerns and lower service utilization.

Adults with insurance coverage are more likely to report past year receipt of mental health care than adults without insurance coverage (25% vs. 11% in 2022, Figure 5). Despite higher utilization of mental health care over time – driven by insured adults – challenges remain with accessing services. For instance, KFF’s 2023 Consumer Survey found that 43% of insured adults with mental health concerns said there was a time in the past year when they did not get the mental health treatment they thought they needed, and 45% gave their insurance a negative rating for the availability of mental health providers. Further, KFF’s 2023 Employer Health Benefits Survey found that among employers offering health benefits, a higher share reported having a sufficient number of primary care providers in their plan’s networks (91%) compared to those who reported having a sufficient number of behavioral health care providers (67%).

The Inflation Reduction Act of 2022 includes several provisions to lower prescription drug costs for people with Medicare and reduce drug spending by the federal government, including several changes to the Part D benefit. These changes, including a new $2,000 cap on out-of-pocket drug spending, will help to lower out-of-pocket costs for Part D enrollees but could also make it harder for some Part D plan sponsors to offer low-priced coverage, particularly sponsors of stand-alone prescription drug plans (PDPs).

In anticipation of potential premium increases by Part D sponsors to cover higher costs associated with a more generous Part D drug benefit, the Inflation Reduction Act included a provision designed to help limit annual premium increases. Specifically, the law caps growth in the base beneficiary premium to no more than 6% above the prior year’s amount, though it is important to note that the base premium is not the same as the individual plan-level premiums charged by Part D sponsors and paid by Part D enrollees. In addition, the Centers for Medicare & Medicaid Services (CMS) made changes to the Part D payment methodology for 2025 to better reflect expected increases in plan liability for the redesigned Part D benefit, with the goal of enhancing market stability. CMS has also announced a new voluntary demonstration to provide additional premium stabilization and enhanced protection against the risk of losses to stand-alone PDPs (see details below).

These FAQs provide context for understanding Medicare Part D premiums in 2025 and changes in recent years. While the impact of the Part D benefit redesign changes on the 2025 Part D market is unknown at this time, premiums for individual Part D plans are likely to continue to vary and annual plan-level premium increases may be higher or lower than 6% for 2025, as they were for 2024. The fall open enrollment period will present all Part D enrollees with the opportunity to evaluate their coverage and determine whether there are lower-cost plan options that meet their needs.

Key Takeaways

• Changes to the Part D benefit in the Inflation Reduction Act will mean lower out-of-pocket costs for Part D enrollees but higher costs for Part D plans overall, leading to concerns about possible premium increases.
• CMS is taking steps to mitigate potential premium increases through a new demonstration program for stand-alone drug plans, as well as payment changes designed to bring greater stability to the Part D market in 2025.
• The Inflation Reduction Act includes a provision to cap growth in the base beneficiary premium to 6%. For 2025, the base premium is $36.78, an increase of $2.08 or 6% over the 2024 base premium. Although this 6% cap doesn’t apply to the individual premiums that plans charge, it does help to limit premium increases.
• Actual Part D plan premiums for 2025 are not yet known and will be announced in September, but premiums are expected to vary, with lower monthly premiums for Medicare Advantage drug plans than stand-alone drug plans, on average, as in 2024. The annual open enrollment period, which runs from October 15 to December 7, presents an opportunity for Part D enrollees to compare plans and shop for lower-priced coverage that meets their needs.

How is the Part D benefit changing for 2025?

The Inflation Reduction Act includes a number of changes to the Medicare Part D drug benefit, including a new $2,000 cap on out-of-pocket drug spending in 2025 for enrollees in Medicare Part D plans. It also requires Part D plans and drug manufacturers to pay a greater share of costs for Part D enrollees with drug costs in the catastrophic coverage phase (above the $2,000 spending cap) and reduces Medicare’s reinsurance liability. The law also eliminates the coverage gap phase as of 2025, where enrollees are currently responsible for paying 25% of their drug costs, drug manufacturers provide a 70% price discount on brand-name drugs, and plans pay 5% of costs.

As of 2025, once enrollees have met their deductible (if their plan includes one), they will enter the initial coverage phase, where they will face cost sharing of 25% under the standard benefit (as in 2024), manufacturers will provide a 10% price discount, and Part D plans will pay 65% (Figure 1). Once enrollees reach the out-of-pocket spending cap and enter the catastrophic coverage phase, plans will be required to pay 60% of drug costs, up from 20% in 2024, and drug manufacturers will be required to provide a 20% price discount on brand-name drugs. Medicare’s share of total costs in the catastrophic phase will decrease from 80% to 20% for brand-name drugs and from 80% to 40% for generic drugs.

Although Part D plans will be taking on additional liability for high drug costs in 2025, Medicare will continue to limit their liability for higher-than-expected drug costs through risk corridors, a risk sharing mechanism that has been in place since the Part D program started in 2006. In addition, CMS is launching a new voluntary demonstration to provide enhanced risk-corridor protection against overall losses for participating stand-alone PDPs to help stabilize the market (see details below).

What is known about Part D premiums for 2025?

CMS announced the Part D base beneficiary premium for 2025 on July 29, 2024 (this announcement typically occurs at the end of July each year). For 2025, the base beneficiary premium is $36.78, an increase of $2.08, or 6%, over the 2024 base premium of $34.70. A provision in the Inflation Reduction Act capped annual growth in the base beneficiary premium to 6% over the prior year’s amount (see details below).

The base premium is calculated as a share of average plan bids for basic Part D benefits submitted by both stand-alone PDPs and Medicare Advantage drug plans (MA-PDs). All Part D plans submit a bid for basic benefits, while plans that offer enhanced benefits, such as a lower Part D deductible, also report the portion of their bid that is for basic versus enhanced benefits. (In 2024, most Part D enrollees were in enhanced plans: 72% of all Part D enrollees, including 79% of MA-PD enrollees and 62% of PDP enrollees). Each year, CMS averages standardized bids submitted by PDPs and MA-PDs to cover basic Part D benefits and calculates the National Average Monthly Bid Amount, or NAMBA. The calculation of the base beneficiary premium is based on the national average bid adjusted for individual reinsurance subsidies. Because the base premium is an average across both types of plans and reflects the cost of basic benefits only, this amount does not equal what a Part D enrollee will pay for coverage in any given Part D plan.

Actual premiums for Part D plans available in 2025 will be released in September, as they are every year, just prior to the October 1 start date of marketing for the coming plan year and the open enrollment period that runs from October 15 to December 7.

How will the new CMS demonstration help to stabilize the Part D market for 2025?

CMS has announced new premium stabilization measures for stand-alone PDPs as part of a voluntary Section 402 demonstration program that will be in effect for 2025 and two additional years (though the exact parameters may vary beyond 2025). Because CMS observed more variation in plan bids for 2025 among PDPs than MA-PDs, the new Part D Premium Stabilization Demonstration is targeted exclusively to PDPs. CMS’s rationale for this demonstration is to stabilize the PDP market in the initial transition years of the Inflation Reduction Act’s Part D benefit improvements, and to test whether the premium changes and revised risk corridors “increase the efficiency and economy” of services as the law’s Part D benefit changes are fully implemented. Similar Section 402 demonstrations were conducted under the George W. Bush Administration in the early years of Part D as the program was being rolled out.

The Part D Premium Stabilization Demonstration has three components for PDPs that choose to participate:

• Lowers the base beneficiary premium by $15 (or less if a $15 reduction would result in a plan premium of less than $0).
• Limits total Part D premium increases to $35 between 2024 and 2025 (applied after taking into account the $15 reduction in the base beneficiary premium).
• Narrows the upper thresholds of the risk corridors to reduce the range of spending where PDPs bear full risk for actual costs higher than their bids and increases the government’s risk sharing for a portion of plan losses from 80% to 90% (Figure 2).

What is the Inflation Reduction Act’s Part D premium stabilization provision and what impact has it had to date?

Beginning in 2024, the premium stabilization provision of the Inflation Reduction Act caps annual growth in the Part D base beneficiary premium at 6%. For 2024, the first year the premium stabilization provision was in effect, the Part D base beneficiary premium was $34.70, a 6% increase over the 2023 amount of $32.74 (Figure 3). Without the premium stabilization provision, the 2024 base beneficiary premium would have been $39.35, an increase of 20%, reflecting a higher average monthly bid amount for basic Part D coverage in 2024 ($68.28) than in 2023 ($34.71).

For 2025, the Part D base beneficiary premium is $36.78, capped at a 6% increase over the 2024 amount. Without premium stabilization, the 2025 base premium would have been $55.98, 42% higher than the 2024 unadjusted base premium (61% higher than the base premium with the 6% cap in 2024). Between 2024 and 2025, the average monthly bid amount for basic benefits increased from $64.28 to $179.45. (See below for examples of how the 6% cap on the base premium helps to limit growth in premiums paid by enrollees for two hypothetical plans.)

What other changes has CMS adopted to help to limit Part D premium increases for 2025?

In addition to the premium stabilization measures described above, CMS has also made changes to its plan payment methodologies for the 2025 plan year. While technical in nature, these changes are designed to enhance market stability through an improved payment methodology that accounts for the substantial changes to the Part D benefit for 2025.

• Updates to the Part D risk adjustment model: The Part D risk adjustment model predicts plan liability for prescription drugs. The model is used to determine the amount of “direct subsidy” prospective payments that Part D plans receive from the federal government, which are adjusted for the health status of a plan’s enrollees. Enrollees with higher risk scores (which vary above and below an average of 1.0) translate to higher expected plan costs and higher subsidy payments. For 2025, CMS took steps to improve the predictive ability of the Part D risk adjustment model, including by recalibrating the model based on more current diagnosis and spending data than used in previous years.
• Using different normalization factors for MA-PDs and PDPs: For individual Part D enrollees, risk scores are calculated based on individual demographic and disease factors, and then adjustments are applied, including a “normalization factor.” New for 2025, CMS is applying different normalization factors for MA-PDs and PDPs, which will have the effect of increasing PDP risk scores relative to what they would have been otherwise. Historically, due to differences in coding and utilization patterns across both types of plans, the Part D risk adjustment model has underpredicted costs for PDP plans and overpredicted costs for MA-PD plans, which has had the effect of increasing standardized plan bids (and premiums) for PDPs relative to MA-PDs. Using separate normalization factors is expected to increase PDP risk scores, which would lead to higher direct subsidy payments, which could mitigate potential premium increases to help stabilize the PDP market. Because MA-PD sponsors can use rebate dollars from Medicare payments to lower or eliminate their Part D premiums, most MA-PD enrollees pay no premium for their Part D drug coverage (see details below).

What factors contributed to the increase in plan bids for basic benefits since 2023?

For 2025, the new $2,000 out-of-pocket spending cap and the increase in Part D plan liability for drug costs incurred by enrollees above the cap, combined with the reduction in Medicare reinsurance, as explained above, are factors in the higher national average monthly plan bid. CMS has emphasized that while the NAMBA increased substantially for 2025, this will be accompanied by substantially higher upfront payments from the government to plans in the form of direct subsidies for basic benefits covered by the plan – a shift from previous years when reinsurance payments accounted for a much larger share of Part D spending than direct subsidy payments. CMS estimates that the average direct subsidy payment will be $142.67, or 80% of the national average bid amount of $179.45.

For 2024, part of the explanation for the higher national average bid for basic benefits was the elimination of Part D enrollees’ 5% coinsurance requirement for drug costs in the catastrophic coverage phase and the increase in plans’ share of these costs from 15% to 20%. Another factor was a revision to the definition of Part D’s “negotiated price” that took effect in 2024 (not to be confused with the new drug price negotiation program established by the Inflation Reduction Act). The definition of negotiated price has been in place since the start of Part D, and it matters because this is the price upon which beneficiary cost sharing is based at the point of sale, which is particularly relevant when enrollees face a coinsurance requirement. Under the change, plans are now required to pass along all price concessions they receive from pharmacies, which help to lower the plan’s total costs, to enrollees at the point of sale. Enrollees will benefit from this change in the form of lower out-of-pocket drug costs, but plans were expected to face higher costs and lower revenues.

What do Part D premiums look like in 2024?

While the impact of the Part D benefit redesign changes on the 2025 Part D market is currently unknown, premiums for individual Part D plans are likely to continue to vary in 2025, as they do in 2024 – ranging from $0 to $100 per month or more. This is in part why Part D enrollees are encouraged to shop for plans during the annual open enrollment period in the fall.

For 2024, the average monthly premium for Part D coverage is $25, including premiums for both Medicare Advantage drug plans (MA-PDs) and PDPs. The average monthly premium for drug coverage in MA-PDs ($9) is substantially lower than in PDPs ($43). In 2024, 57% of all Part D enrollees are in MA-PDs in 2024 and 43% are in stand-alone prescription drug plans (PDPs).

The lower MA-PD average premium is heavily weighted by the predominance of zero-premium plans in the MA-PD market, because, as noted above, MA-PD sponsors can use rebate dollars from Medicare payments to lower or eliminate their Part D premiums. For 2024, all Medicare beneficiaries had access to zero-premium MA-PD plans – 27 on average – whereas only 1 PDP was available for zero premium for non-LIS enrollees in only 14 out of 34 PDP regions.

Even with changes to the Part D benefit between 2023 and 2024 that increased plan liability, the average monthly premium for Part D coverage across both plan types combined was the same in both years ($25) (Figure 4). The average MA-PD premium decreased by $1 (from $10 to $9), while the average PDP premium increased by $3 (from $40 to $43).

The $43 average PDP premium is based on enrollment in March 2024 after the end of open enrollment. This amount is lower than the estimated $48 premium for 2024, which was calculated in the fall of 2023 before open enrollment for 2024 and did not account for plan switching by current enrollees or plan choices by new enrollees during the open enrollment period. The fact that the actual average PDP premium for 2024 is lower than the estimated premium indicates that some PDP enrollees opted for lower-premium plans during open enrollment.

What share of Part D enrollees pay no premium for drug coverage?

Overall, nearly half of the 30.1 million Part D enrollees who are not receiving Part D low-income subsidies (LIS), or 14.3 million enrollees, pay no premium for their drug coverage in 2024 (Figure 5). The share of Part D enrollees paying no premium is heavily weighted by MA-PD enrollees. In 2024, three-quarters of MA-PD enrollees without LIS pay no premium for their drug coverage compared to 13% of PDP enrollees.

How does the Inflation Reduction Act premium stabilization provision help to limit growth in Part D premiums?

The premium for an individual plan is calculated as the base premium plus the difference between the plan’s bid and the national average bid (the NAMBA). Examples with two hypothetical plans illustrate how the 6% cap on growth in the base premium limits premium growth for an individual plan (Table 1).

For both plans, the 6% premium stabilization cap mitigates the increase in plan premiums between 2023 and 2024. For Plan A, with the 6% cap in effect, the premium increased by 10%, but without the 6% stabilization cap, the premium would have increased by 31%. Similarly, for Plan B, the 6% cap limits premium growth to 19%, compared to a 32% increase without the cap.