HHS Suggests Updates to Medicare Drug Costs, Plan Ratings
TL/DR –
The Trump administration has proposed a rule to make changes to cost-sharing in Medicare’s Part D prescription drug benefit and update the methodology used to rate Medicare Advantage plans. The rule, RIN 0938-AV63, would enact changes to Part D that were introduced under the Inflation Reduction Act by Congress during President Biden’s tenure, and update the star ratings system for insurers. The changes, which are intended to improve access to quality care for Medicare beneficiaries, are set to take effect in 2027.
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Trump Administration Proposes Changes to Medicare’s Part D and Private Advantage Plans
The Trump administration put forward a proposal on Tuesday that seeks to solidify alterations to patient cost-sharing involved in Medicare’s Part D prescription drug benefit. The proposal also includes an update to the method used to rate private Medicare Advantage plans.
The proposal, dubbed RIN 0938-AV63, aims to enact changes to Part D, as legislated in the Inflation Reduction Act during
Mehmet Oz, Centers for Medicare & Medicaid Services administrator, stated, “The Trump Administration is committed to ensuring Medicare beneficiaries have access to high-quality affordable care options. This proposed rule continues that commitment by enhancing Star Ratings to reward meaningful improvements in quality and innovation, while making it easier for beneficiaries to compare and choose coverage that best meets their needs.”
Amid Medicare Changes
This rule is proposed amidst a series of modifications to Medicare. Price negotiations with drug manufacturers in the second round under the Inflation Reduction Act are slated for disclosure by Nov. 30. Meanwhile, pharmaceutical companies persist with their legal contest of the law. Simultaneously, insurers are battling in court over star quality ratings while scaling back Medicare operations nationwide.
The Inflation Reduction Act has removed Part D’s coverage gap as part of a more comprehensive overhaul of the program’s finance model, a change that CMS aims to implement in 2027. The Act also introduced a $2,000 annual cap on out-of-pocket expenses for prescription drugs, which took effect this year.
Additional Changes and Proposals
Other proposals from the CMS include the removal of star rating measures deemed to be based on “administrative processes,” which do not accurately reflect a plan’s quality. They also proposed disregarding a change associated with social risk factors among enrollees, while introducing new measures centered on depression treatment.
The CMS proposal would also grant Medicare Advantage members a special enrollment period when their physician exits their network.
Additionally, the CMS is seeking public feedback on ways to boost competition and quality in Medicare Advantage, including the use of artificial intelligence and new data sources in risk adjustment – a strategy used to compensate insurers for enrolling patients with more severe health conditions.
The CMS is also encouraging public feedback on enhancing well-being and nutrition for Medicare patients, along with strategies to manage the “significant growth” in special needs plans focused on chronic conditions.
Most Medicare Advantage plans have seen a decline in premiums over the past decade, averaging $13 in 2025, as per health-care think tank KFF’s report. The cap for out-of-pocket medical expenses is set at $9,350 for in-network services and $14,000 for combined in-network and out-of-network services.
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