KFF (Kaiser Family Foundation) has released a new analysis that raises important questions about the future of Medicare’s stand-alone Part D prescription drug plans (PDPs), which are primarily used by people enrolled in traditional Medicare.
Over the past few years, the number of stand-alone PDP options has declined, while premiums have crept up—making it harder for beneficiaries to find affordable drug coverage unless they switch to Medicare Advantage. While Advantage plans often include drug coverage at no additional cost, they come with trade-offs: narrower provider networks, prior authorization requirements, and less flexibility compared to traditional Medicare.
To stabilize the market and avoid a steep spike in premiums, the Biden administration launched a temporary demonstration program in 2024. This program supported plans during the transition to a restructured Part D benefit that began in 2025—most notably adding a $2,000 cap on annual out-of-pocket drug costs. However, the future of that demonstration program is unclear. The Trump administration has yet to announce whether it will extend it beyond 2025. A decision is expected by the end of July.
The stakes are particularly high for people living in rural areas, where traditional Medicare enrollment is higher and Medicare Advantage plan options are limited.
According to KFF, about 55 million people are enrolled in Medicare drug coverage in 2025. Of those, 32 million are in Medicare Advantage plans, while 23 million remain in stand-alone PDPs. Despite premium increases in some plans (up to $35/month—the maximum allowed under the demonstration), stand-alone plan enrollment has stayed stable for now.
The future of this market—and the choices available to beneficiaries—may depend on what happens next in Washington.