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Analysis

CMS Announces 'Historically Low' Medicare Advantage Premiums, New Insulin Payment Model

By John Commins  
   September 25, 2020

More than 1,600 Medicare Advantage and Part D prescription plans will cap insulin monthly copays at no more than $35. 

Medicare Advantage premiums in 2021 will be 34.2% lower than they were in 2017, with a monthly average that will be the lowest since 2007, the Trump administration announced Thursday.

In addition, Trump officials said that more than 1,600 Medicare Advantage and Part D prescription plans will cap insulin monthly copays at no more than $35.  

"Today's announcement confirms that market competition works," Centers for Medicare & Medicaid Services Administrator Seema Verma said.

"Historically low premiums, massive savings on insulin, and more supplemental benefits represent the welcome fruit of the creative, patient-oriented policies that this administration has made its calling card. Medicare beneficiaries will feel the difference – in their health as well as their pocketbook," she said.

The announcement comes weeks before the annual open enrollment period for Medicare. About 26 million people are projected to enroll in Medicare Advantage. The trending lower Medicare Advantage premiums have saved beneficiaries nearly $1.5 billion since 2017, CMS said.

In addition:

  • The Medicare Advantage average monthly plan premium is expected to decrease 11%  to $21 in 2021 from an average of $23.63 in 2020. In some states including Alabama, Nevada, Michigan, and Kentucky, beneficiaries will see average premium decreases of over 50% since 2017.
     
  • Beneficiaries will have about 2,100 more Medicare Advantage plans operating in 2021 than in 2017, a 76.6% increase. Beneficiaries can choose from more than 4,800 Medicare Advantage plans during 2021 open enrollment.
     
  • The average number of Medicare Advantage plan choices per county will increase from about 39 plans in 2020 to 47 plans in 2021, a 78.5% since 2017. The number of plan options in rural counties has increased to 2,900 in 2021 from about 2,450 in 2020, an 18%.
     
  • The projected Medicare Advantage enrollment for 2021 would be a 44% increase since 2017.
     
  • Starting in 2021, beneficiaries with End Stage Renal Disease can enroll in a Medicare Advantage plan.
     
  • The average basic Part D premium will be approximately $30.50 in 2021. Part D premiums have decreased by 12% since 2017, saving beneficiaries nearly $1.9 billion.
     
  • Part D continues to be an extremely popular program, with enrollment increasing by 16.7% since 2017.
     
  • Since 2017, beneficiaries have saved approximately $3.4 billion in combined Medicare Advantage and Part D premium costs.

“Today's announcement confirms that market competition works.”

John Commins is a content specialist and online news editor for HealthLeaders, a Simplify Compliance brand.


KEY TAKEAWAYS

The Medicare Advantage average monthly plan premium is expected to decrease 11%  to $21 in 2021 from an average of $23.63 in 2020.

Beneficiaries will have about 2,100 more Medicare Advantage plans operating in 2021 than in 2017, a 76.6% increase. 

The average number of Medicare Advantage plan choices per county will increase from about 39 plans in 2020 to 47 plans in 2021, a 78.5% since 2017. 

The projected Medicare Advantage enrollment for 2021 would be a 44% increase since 2017.


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