Stand-Alone PDP Market Lives to Fight Another Day, Enrollment Data Shows

In defiance of some industry watchers’ expectations, there was no mass exodus from stand-alone Prescription Drug Plans (PDPs) to Medicare Advantage Prescription Drug (MA-PD) plans between 2024 and 2025, one prominent Part D actuary has observed. 

“Total enrollment was effectively flat from December [20]24 to February 2025; that’s a little bit at odds with what some might have expected,” explains Brooks Conway, principal with Oliver Wyman.  

As for why enrollment trends this year defied expectations, Avalere Health Principal Robin Duddy-Tenbrunsel points out that “there’s been quite a bit going on” in the Part D world. 

“This is a year where we were all eagerly awaiting the enrollment files to understand a little bit better how that would line up with some of the trends that we saw in benefit design for ’25 back in the fall — and get a better sense of how plans and beneficiaries are responding to changes based on the Inflation Reduction Act,” adds Duddy-Tenbrunsel. 

The IRA made major changes to the Medicare Part D benefit structure this year, placing a $2,000 cap on seniors’ out-of-pocket drug expenditures and increasing plan sponsors’ responsibility for spending above that cap from 20% to 60%.  

And in 2024, the IRA created a $35 monthly cost-sharing cap on insulin products for Medicare beneficiaries and a $0 cost-sharing cap on certain vaccines. Additionally, CMS last year started requiring Part D plans to include pharmacy price concessions in the negotiated price of covered drugs. 

While all of those changes applied to both MA-PD plans and PDPs, MA-PD plans are better able to avoid large premium increases, experts previously told AIS Health, a division of MMIT. Thus, industry observers feared that the PDP market — which has already seen fewer and fewer plan options in recent years — would have its most challenging year yet in 2025. 

“One of the predictions I’ve been making for over two years is unfortunately coming true, and that is that the stand-alone Prescription Drug Plan market is tanking,” Drug Channels President Adam Fein, Ph.D., said during his Dec. 13, 2024, outlook webinar about the year ahead. He called it a “clear, unintended consequence” of the IRA. 

Fein also pointed out that PDPs have long been on the decline; in 2007, there were almost 1,900 stand-alone PDPs, but in 2025, “there’s going to be 464 plans.”  

Demo, MA-PD Benefit Shifts Played Role 

However, total PDP membership as of February 2025 — after the Annual Election Period — totaled approximately 23.5 million members, compared to 23.2 million as of December 2024. Enrollment in individual (nonemployer) PDP plans was even flatter, totaling about 18.2 million in both December 2024 and February 2025. 

One major reason for the fact that PDP enrollment stayed stable was the Biden administration’s deployment of the Medicare Part D Premium Stabilization Demonstration, according to Conway and Duddy-Tenbrunsel. For Part D plan sponsors that participated — and nearly all did — the demonstration applied a $15 reduction to the Part D base beneficiary premium, which helps calculate plan-specific basic premiums. It also placed a $35 limit on plan-specific year-over-year premium increases, and it adjusted risk corridors to allow greater government risk sharing for potential losses experienced by PDPs.   

Another variable working in favor of Part D plans this year was the highly technical risk score “split normalization factor” between MA-PD plans and PDPs. “That just mathematically functioned as something that helped PDPs and was a headwind to MA-PD plans,” Conway explains.  

What’s more, insurers this year made significant changes to their MA-PD plans in response to industry-wide headwinds, with some firms making strategic market exits and/or slimming down benefits. “It’s possible that some of that shifting made MA-PD less inviting,” Conway says. Enrollment in MA-PD plans grew about 4.3% in 2025 — a rate that is slower than has been the case in previous years, Duddy-Tenbrunsel points out.  

Finally, “there’s probably just a large portion of the senior market that is just not wanting to give up the flexibility of traditional Medicare no matter what,” Conway adds.  

Fein largely credits the premium stabilization demonstration for keeping the PDP market afloat — and stands by his prediction that the market remains in dire straits. 

"The IRA makes PDPs less economically viable. That's a key reason the number of stand-alone PDPs in 2025 is lower than at any time since the launch of the Part D program,” he tells AIS Health. “For 2025, plans increased their bids by 179% over the 2024 bid amounts, due to the plans’ higher costs from the IRA. CMS handed PDPs $5 billion to limit these premium increases, which prevented a complete collapse of enrollment,” he adds, referring to the premium stabilization demo.  

“PDPs also benefited from repricing by MA-PD plans,” Fein continues. “Despite this support, year-over-year MA-PD enrollment grew by nearly four times as much as PDP enrollment. The long-term prognosis for PDPs remains negative.” 

The future of the premium stabilization demo is unclear, as conservatives have lambasted it as a taxpayer-funded bailout for insurers. Duddy-Tenbrunsel says that next month, “we might have a little bit of a better sense” of how the Trump administration will approach MA and Part D policies, because that’s when federal officials are expected to finalize “some of those rules looking ahead to 2026.”         

Wellcare Is King in PDP Market 

Even though enrollment in individual PDPs was stable in 2025, Conway points out that there was significant movement within the market.  

CVS Health Corp.’s Aetna — which last year was clear about its desire to put margins over membership growth when making its 2025 Medicare bids — lost about 1 million individual members, and Centene Corp.’s Wellcare gained about 1 million, Conway observes.  

Put another way, Wellcare’s individual PDP enrollment increased by 13% between December 2024 and February 2025, while Aetna’s declined by 27%, notes Thomas Kornfield, founder and CEO of MAST Health Policy Solutions. And UnitedHealth Group’s enrollment dipped by about 7%. 

“The enrollment changes for 2025 are driven in part by CVS’s decision to no longer offer any enhanced plans, and United’s decision to only offer one enhanced plan per region in 2025,” observes Kornfield, who previously held roles at Avalere, AHIP and CMS. 

He also notes that enrollment in basic PDPs rose from 6.7 million in December 2024 to 7.7 million in February 2025 (a 15% increase), while enrollment in enhanced PDPs decreased from 11.4 million to 10.4 million (a 9% decline). 

Wellcare now makes up the largest share of PDP enrollment, perhaps because it is the only carrier offering $0 premium plans, according to Conway. That may also have helped keep some people in PDPs generally, as some enrollees in regions where major carriers implemented large premium increases would be able to shift into a less expensive plan. 

Meanwhile, the market overall has gotten significantly more concentrated in recent years, according to Conway. He observes that the top five carriers — Wellcare, UnitedHealth, Aetna, Humana Inc. and Cigna — now account for about 95% of individual PDP membership, with the remaining 5% spread across regional Blue Cross Blue Shield plans.  

This article was reprinted from AIS Health’s biweekly publication Radar on Drug Benefits.