Medicare Advantage (MA) is a government-sponsored program offering an alternative to traditional fee-for-service (FFS) Medicare, where benefits are provided to Medicare beneficiaries by private health plans, otherwise known as Medicare Advantage organizations (MAOs). MAOs offer plan designs with varying benefits and premiums.
In the Milliman MACVAT®, each MA plan’s benefit offerings and premium are evaluated to create an associated “value added,” Milliman’s proprietary measurement of plan value. This white paper highlights changes in value added and key benefit trends in the MA market from 2024 to 2025. This discussion focuses on general enrollment plans (that is, plans that do not target beneficiaries who are dually eligible for both Medicare and Medicaid, have certain chronic conditions, or require an institutional level of care). A separate paper discussing dual-eligible plans can be found here. Please note that this paper will be revised and re-issued following the release of January 2025 enrollment.
Average value added of general enrollment MA plans is decreasing substantially from 2024 to 2025
Figure 1 shows the average annual growth in value added (total, Part C, and Part D) from 2022 to 2025. It also shows the components of value added, which are benefit value (Part C and Part D) and member premium (Part B buydown and C plus D premium) from 2022 to 2025.
Figure 1: Average value added, benefit value, and premium PMPM growth / decline for general enrollment MA plans in the last four years
Average total value added, with significant growth from 2022 to 2023 and stability from 2023 to 2024, decreased almost $16 PMPM from 2024 to 2025. From 2022 to 2023, the total value added of general enrollment MA plans grew by about 9%, due to enhancements in Part C (medical) and Part D (drug) benefits, coupled with reductions in member premiums. From 2023 to 2024, total value added was relatively flat, but marked the first time that there were small degradations in both Part C and Part D benefit values nationally. In a significant departure from prior years, the total value added of general enrollment MA plans decreased by more than 6% from 2024 to 2025.
This substantial value added decline in the MA market is driven by leaner MA plan benefit offerings in 2025 paired with level member (Part C + Part D) premiums
- Reductions in Part C and Part D benefits resulted in a decrease of nearly $19 PMPM to MA benefit value from 2024 to 2025. This impacts both Medicare-covered benefits and supplemental benefits, which are discussed in more detail below.
- National carriers notably scaling back benefits contributes to much of the decreases in benefit value and value added, given that these comparisons are market averages. Multiple national organizations have discussed margin pressures on recent earnings calls, and this is likely driving the observed degradation of benefits.
- The total member (Part C + Part D) premium was only reduced about $0.40 PMPM from 2024 to 2025 relative to $1 to $3 PMPM decreases in prior years.
- Part B Premium buydowns on average increased slightly relative to prior years, while prevalence of a non-$0 Part B Premium buydown increased significantly. This market change coincides with changes to the August resubmission rebate mechanics as well as one large national increasing its Part B buydown, on average, into 2025.
Part D benefit value decreased by about $8 PMPM from 2024 to 2025 likely due to pressures from Part D program changes. Large changes in Part D benefit designs are likely in response to Part D programmatic changes, mainly the benefit re-design introduced by the Inflation Reduction Act (IRA)1,2,3.
- Of note is the fact that many Medicare Advantage prescription drug (MA-PD) plans moved brand drug cost sharing from a copay to a coinsurance benefit, likely in response to the “greater of” maximum-out-of-pocket (MOOP) accumulation impact on plan liability4,5.
- Additionally, Part D deductibles, on average, increased from $63 in 2024 to $225, which is similarly likely driven by increased pressures on plan liability due to the IRA changes.6
- Some national carriers maintained consistent Part D benefits relative to 2024, but no national carrier significantly enhanced Part D benefits in 2025.
Regardless of the strategic approach taken, these changes appeared to apply consistently across much of the respective national carrier’s general enrollment plans.
While the changes from the IRA on average drive out-of-pocket savings to the member, specifically the introduction of a $2,000 MOOP, the Part D benefit value considers the additional funding received by plans through the direct subsidy payment. We discuss more detail behind this measurement and the methodology of valuating 2022 through 2024 benefits in the Methodology section of this white paper.
Part C benefit value decreased by almost $11 PMPM from 2024 to 2025. This change demonstrates that, for the first time in recent history of the MA program, plans greatly reduced their medical benefits year over year. This is likely a response to revenue pressures on the MA program, as some contracts experienced star rating reductions due to new measurement standards7 in addition to rising healthcare trends, changes in risk score models, and other potential headwinds. Plans on average pulled back on supplemental benefits and increased medical MOOP levels, as discussed below. Most large carriers (both national and regional) scaled back supplemental benefits, and this drives the average benefit value decrease, which may be a lever in controlling margin pressures. How plans scaled back benefits differed significantly by organization.
Medicare-covered benefit changes vary by benefit type
MA plans are required to cover all benefits covered by FFS Medicare and to also provide a medical MOOP limit for annual member cost sharing. FFS Medicare benefits include inpatient services, outpatient services, professional services, and other services including ambulance and durable medical equipment. Based on the value added metric and the benefit value attributed to these service types, it appears that many MAOs made Medicare-covered benefits leaner than in 2024.
The average MOOP increased from about $4,700 to $4,900 from 2024 to 2025, increasing member cost-sharing liability for medical services by over 5% relative to 2024. This varied significantly when reviewing organizations of different sizes. A plan’s MOOP will most impact beneficiaries with high utilization of more costly services, such as inpatient or outpatient care, because these beneficiaries are more likely to reach the MOOP during the year. Average general enrollment MOOPs increased by 1% from 2023 to 2024 and decreased by 4.5% from 2022 to 2023, making the 5% MOOP increase in 2025 a notable outlier in recent years.
Average medical deductibles for general enrollment plans increased substantially in 2025 relative to prior year increases. As seen in Figure 2, the average medical deductible increased by more than $6 from 2024 to 2025, surpassing the 2022 to 2024 annual deductible increases of about $2 to $3. Notably, the percentage of members enrolled in a plan with a $0 deductible dropped significantly for 2025, indicating that fewer plans are offering $0 medical deductibles in efforts to reduce plan costs. Much of this change was driven by one large national, but one other organization of material size had large Part C deductible increases as well, and therefore both are driving the increase.
Figure 2: Average medical deductible and percent of members with a $0 medical deductible for general enrollment MA plans in the last four years
Average primary care physician (PCP) copays decreased from 2024 to 2025. PCP average cost sharing has been steadily decreasing since 2017, with reductions from $1.02 to $0.69 from 2024 to 2025. The continuing decrease in cost sharing on this service amidst the decrease in Part C value added from 2024 to 2025 suggests that MAOs consider low cost sharing on primary care services key to attracting and retaining membership in the general enrollment market. Low PCP cost sharing may also suggest an effort for plans to mitigate revenue pressures through closer managed care and improved star rating efforts, or to stay aligned with risk-bearing provider partners, and demonstrates that this benefit is less likely to be reduced in light of overall benefit reductions plans needed to make.
General enrollment plans offer leaner Medicare and non-Medicare covered benefits in 2025
MA plans are required to offer standard FFS Medicare-covered benefits but typically also offer benefits not provided under FFS Medicare, which are referred to as supplemental benefits. This discussion of supplemental benefits focuses on mandatory supplemental benefits and excludes optional supplemental benefits, for which members elect coverage and pay an additional premium.
Figure 3: Average benefit value for Medicare and non-Medicare covered benefits for general enrollment MA plans in the last four years
The benefit value of supplemental benefits decreases by over $6 PMPM in 2025, marking the first year of declining supplemental benefits in recent Medicare Advantage history. This decrease is seen across nearly all supplemental benefit categories in aggregate, but is driven primarily by cuts to dental benefits and lower limits in OTC benefit card offerings. Medicare-covered benefit value also decreases in 2025 by over $4 PMPM as plans increased MOOP and medical deductibles, among other service category cost-sharing increases. How plans scaled back benefits differed significantly by organization.
Part B buydown benefit continues to grow in 2025
Part B buydown benefits, or a monthly “give back” to members to fund their required Part B premium payment, has continued to grow in both prevalence and dollar amount in 2025. Figure 3 shows the average monthly Part B buydown benefit for general enrollment plans as well as prevalence of the benefit from 2022 through 2025.
Figure 4: Part B buydown in general enrollment MA plans
The percentage of beneficiaries with a Part B premium buydown benefit nearly tripled from 2024 to 2025. This significant increase in the Part B buydown prevalence paired with an increase in the average monthly Part B buydown amount coincides with a change in the Centers for Medicare and Medicaid Services' (CMS’) August rebate submission rules and the unprecedented likelihood of plans missing the direct subsidy by a large magnitude (the result being organizations needing to use $1 to $3 of Part B buydown to align with CMS guidance), as well as one large national increasing their average Part B buydown into 2025.
Data sources and methodology
To perform these analyses, we relied on detailed information on MA benefits, premiums, and enrollment as released by CMS. Enrollment used to calculate weighted averages is from February of each year, with the exception of 2025, which relies on September 2024 enrollment crosswalked to 2025.
The estimated value of the Part C and Part D benefits is evaluated using Milliman’s internal pricing models, including the 2025 Milliman Medicare Advantage Competitive Value Added Tool (Milliman MACVAT), which is available for external license, calibrated to county-specific 2025 FFS costs with consistent medical management and population base assumptions for each county. The 2022 through 2025 benefits within the 2025 MACVAT are evaluated on a consistent basis, without adjustment for year-over-year healthcare trends, such that the only difference between the years presented are the benefits and premiums offered by a plan in each year. This information is used in conjunction with plan-specific benefits, premiums, and benchmark revenue by county released by CMS to determine the value added for each plan.
While the major Part D benefit re-design from the IRA will go into effect in 2025, the 2022 through 2024 Part D benefit values presented in this paper are modeled under the 2025 benefit re-design, meaning that the 2022 through 2024 values still reflect the plan’s actual formulary and benefits (e.g., deductibles, cost sharing in standard coverage phase, non-Part D drug coverage, etc.) but excludes enhanced gap coverage and assumes the member has a $2,000 MOOP in each year. This approach allowed for a more apples-to-apples comparison of Part D benefit changes year over year and does not credit or discredit plans for inherent benefit changes that are mandatory (e.g., the removal of the coverage gap phase in 2025 does not influence the 2024 to 2025 benefit value changes for plans with enhanced gap coverage in 2024).
This analysis excludes SNP, PDP, MSA, MMP, PACE, Part B only, and cost plans. We excluded all U.S. territories from these results.
2026 will usher in more unknowns as revenue pressures increase
2025 marked the first year MAOs used benefit design as a material lever to address market headwinds, with respect to their general enrollment plan offerings. 2026 will likely result in even further benefit design changes given the looming impacts to the entire MA market—including drug price negotiations, star rating methodology changes, continued revenue pressures, changes in member buying habits and shopping preferences, and market reactions to competitor strategies in 2025, just to name a few.
It is essential for MAOs and other healthcare stakeholders to understand local market implications of the anticipated market changes noted above on general enrollment competitor benefit designs. Healthcare stakeholders who understand these changes in relation to their own strategic objectives will be best equipped to minimize revenue reductions compared to competitors and mitigate risks from industry headwinds. The Milliman MACVAT value added metric with its underlying methodology and data provides the financial clarity that healthcare executives need to develop rational strategic benefit designs while addressing market pressures head on.
Caveats, limitations, and qualifications
The information in this paper is intended to describe changes and trends in the Medicare general enrollment market. It may not be appropriate, and should not be used, for other purposes.
We relied on publicly available enrollment and premium data from the Centers for Medicare and Medicaid Services and the Milliman MACVAT to support the data presented in this paper. If this information is incomplete or inaccurate, our observations and comments may not be appropriate. We reviewed the data for reasonability but did not audit the data.
Milliman has developed certain models to estimate the values included in this paper. The intent of the models was to estimate the value added of services above traditional Medicare for 2025 MA-PD plans, as well as summarizing all benefits offered in the MA-PD market from 2022 through 2025. Milliman has reviewed the models, including their inputs, calculations, and outputs, for consistency, reasonableness, and appropriateness to the intended purpose and in compliance with generally accepted actuarial practice and relevant Actuarial Standards of Practice (ASOP).
Julia Friedman, Jordan Cates, and Libby Phillips are members of the American Academy of Actuaries and meet the qualification standards of the American Academy of Actuaries to render the actuarial opinion contained herein.
1 Cline, M., Karcher, J., Klaisner, J., et al. (August 2022). Weathering the reform storm: The Inflation Reduction Act's changes to Medicare and other healthcare markets. Milliman.com. Retrieved December 6, 2024, from: https://www.milliman.com/en/insight/weathering-the-reform-storm.
2 Berman, A., Robb, M., & Pierce, K. (September 2022). The Inflation Reduction Act passed, now what? Milliman.com. Retrieved December 6, 2024, from: https://www.milliman.com/en/insight/the-inflation-reduction-act-passed-now-what.
3 Berger, C., Engel, T. & Wanta, T. (August 2023). Part D redesign under the Inflation Reduction Act. Milliman white paper. Retrieved December 6, 2024, from: https://www.milliman.com/en/insight/part-d-redesign-under-ira-potential-financial-ramifications.
4 Karcher, J., Magnusson, J. & Robb, M. (August 2024). Out of whose pocket? Many beneficiaries will spend less than expected to reach the IRA's new $2,000 out-of-pocket spending limit. Milliman.com. Retrieved December 6, 2024, from: https://www.milliman.com/en/insight/out-of-whose-pocket-inflation-reduction-act.
5 Friedman, J. (October 2024). Medicare Advantage under pressure: How MA-PD plans are responding in 2025. Milliman white paper. Retrieved December 6, 2024, from: https://www.milliman.com/en/insight/medicare-advantage-ma-pd-plans-2025.
7 Rogers, H. & Smith, M. (November 2024). Star Ratings in Retrograde: Decoding the 2025 Decline. Milliman white paper. Retrieved December 6, 2024, from: https://www.milliman.com/en/insight/star-ratings-in-retrograde-decoding-the-2025-decline.