Some issuers of 2017 Medicare Advantage managed care plans may be keeping average monthly premiums down by increasing the enrollees’ out-of-pocket costs. Those are what the policyholders think of as troubling coverage holes, and what insurance policymakers’ and product designers like to think of as helpful “skin in the game” that pushes patients to do what they can to hold down health care spending.
Evidence of that cropped up when we compared state averages for 2017 Medicare Advantage monthly premiums, annual drug deductibles and annual maximum out-of-pocket spending limits in new 2017 data files with the comparable state averages for 2016.
Medicare Advantage, or Medicare Part C, gives private insurers a chance to sell plans that replace traditional Medicare coverage. The open enrollment period for the program is set to start Oct. 15 and end Dec. 7. The program could attract about 18.5 million enrollees next year, or about 32 percent of all Medicare enrollees, according to officials at the Centers for Medicare & Medicaid Services.
CMS officials say they expect the average monthly Medicare Advantage plan premium to fall about 4 percent in 2017, to $32.59.
Like issuers of commercial coverage, Medicare Advantage plan issuers can keep premiums low by increasing built-in coverage gaps, such as drug benefits deductibles and out-of-pocket spending limits.
An analysis of the program data files suggests that the consolidated monthly premium, which includes the cost of drug coverage as well as medical coverage, will fall 7.6 percent, to $58. But the average prescription coverage deductible will increase 8.4 percent, to $170, and the average annual out-of-pocket maximum will rise 4.6 percent, to $5,445. The average premium is also down about 8 percent from the 2015 average, but the drug deductible is about 27 percent higher than what it was in 2015 about $124) and the out-of-pocket spending maximum is up 9 percent from the 2015 average (about $5,018).
Traditionally, many policymakers have seen increasing enrollees’ share of the costs as a good way to hold down expenses and discourage enrollees from seeking unnecessary care. Patient groups say efforts to increase the built-in holes in coverage have gone to far and are keeping some patients from getting necessary care. Hospital companies have said high patient out-of-pocket spending requirements are causing collections problems for providers.
The average premium in Puerto Rico will be $17.
Within the mainland United States, monthly premiums will range from $19 in Florida, to $51 in North Dakota.
The average drug plan deductible will range from $65 in Pennsylvania to $302 in Nebraska.
The average annual out-of-pocket maximum will range from $3,777 in Minnesota to $6,700 in Delaware and in Wyoming, which has data on only one plan’s out-of-pocket maximum in the 2017 data file.
We came up with a crude measure of how attractive a state’s Medicare Advantage plans are overall by ranking the states in terms of average premiums, drug deductibles and out-of-pocket spending maximums.
New Jersey came in last, with an average ranking of 41.
For a look at the five states with the best results, along with a table showing 2016 and 2017 Medicare Advantage plan premium, drug deductible and out-of-pocket maximum data for all 50 states, read on:
Average premium: $47.
Average 2016 premium: $47.
2017 premium ranking: 19.
Average drug deductible: $85.
Drug deductible ranking: 5.
Average maximum out-of-pocket cost limit: $5,586.
Out-of-pocket maximum ranking: 27.
Average of the three ranking: 17.
4. Rhode Island
Average premium: $60.
Average 2016 premium: $57.
2017 premium ranking: 32.
Average drug deductible: $119.
Drug deductible ranking: 12.
Average maximum out-of-pocket cost limit: $4,300.
Out-of-pocket maximum ranking: 5.
Average of the three ranking: 16