According to the Center for Medicare and Medicaid Services (CMS) 32% of Medicare beneficiaries are enrolled in a Medicare advantage plan – that’s more than 17 million people. And enrollment has increased 50% since 2009.
Plan quality has been improving, with 71 percent of Medicare advantage enrollees now enrolled in a plan rated at either four or five stars out of five.
Average plan premiums today are lower, dropping about 10 percent between 2010 and 2016.
On a personal note – we have observed that copays are generally higher today than they were in 2010. Example: We remember daily hospital copays in the $150-$200 range, but today they are more like $250-$350. I’m not suggesting these plans are not a good value, but I am suggesting they have changed.
The above information provides evidence that Medicare advantage plans are providing good value to millions of a Americans with premiums remaining relatively stable and plan benefits remaining competitive – especially when compared to “under-age” health plans.
According to the Kaiser Family Foundation the average advantage premium in 2016 is $37 per month, similar to premiums for the past five years. Premiums are lower for HMOs and regional PPO, but do vary significantly from one county to the next.
However, there is some cause for concern: Approximately 55% of plans are offered by just four insurance companies: Aetna, Humana, United Healthcare, and Kaiser Permanente. Aetna’s announced intention to acquire Humana – should it happen – will mean 55% of plan members will be enrolled with just three companies. Less competition may lead to less value for consumers. Time will tell
The 2016 standard part D deductible is $360. In addition, significantly more plans have a deductible in 2016 than in previous years. CMS recently announced the 2017 standard deductible will increase by $40 to an even $400.
The initial coverage level limit will increase from $3310 to $3700 and the out-of-pocket threshold will go from $4850 to $4950.
In 2017 part D enrollees will enjoy a 60% discount on brand name drugs and 50% discount on generic drugs, while in the donut hole.
If you have question about how this impacts you, give us a call.
Lonnie Thibodeaux is the owner of Sargent Insurance and Financial Services. He specializes in Medicare health plans and prescription drug plans.