2017 state Medicare Advantage bargain plan counts

Insurers seem be taking a tougher approach to 2017 Medicare Advantage plan pricing than the premium figures suggest. 

The Medicare Advantage program, or Medicare Part C program, gives private insurers a chance to sell plans that serve as a complete replacement for traditional Medicare coverage. The Medicare Advantage open enrollment period for 2017 is set to start Oct. 15 and run until Dec. 7.

Back in April, when the Centers for Medicare & Medicaid Services was setting the preliminary 2017 program parameters, some predicted CMS efforts to squeeze subsidy levels would lead to big premium increases or big cuts in plan menus.

Two weeks ago, when CMS released final county-level price data for 2017, it showed that typical 2017 premium increases will be modest. The average monthly consolidated premium for Medicare Advantage and drug coverage will fall 7.8 percent, to $58.

But insurers are compensating for efforts to hold premiums to eyeball-catching levels by raising the enrollees’ amount of “skin in the game,” or out-of-pocket spending.

The average prescription coverage deductible will rise 8.4 percent, to $170. The average out-of-pocket maximum will increase 4.6 percent, to $5,445. Both the drug deductible and the annual out-of-pocket maximum are increasing much faster than the 1.1 percent U.S. Consumer Price Index inflation rate.

Related: 2017 Medicare Advantage hole rankings

This week, we analyzed the same CMS Medicare Advantage county-level plan data another way: by looking for the number of bargain plans available in each state.

We classified a plan as a bargain plan if the CMS data file for 2016 or 2017 shows the plan has, or will have, a monthly premium less than or equal to $100 and an annual out-of-pocket spending maximum less than or equal to $3,000.

Census figures show that the median U.S. household with a head 65 years old or older has about $5,800 in cash in savings and checking accounts. 

We included only plans in the basic Medicare Advantage plan data files, and only plans that have numbers in the premium and out-of-pocket limit columns, rather than comments, such as “to be determined.” That means we may be excluding some unusual types of bargain plans, or bargain plans that got their premiums or out-of-pocket spending limits to CMS late.

We looked only at the premium and out-of-pocket limit figures. We did not try to adjust the results for provider network size or quality measures.

That roughed filtering method identified just 818, or 2.4 percent, of the 34,448 plans available this year as bargains in terms both of premiums and of annual out-of-pocket spending maximums. In 2016, 703, or 2 percent, of the 34,218 plans available qualified as bargains using those measures.

For more about the Medicare Advantage bargain plans, read on:

Pennsylvania is the highest-population state with no great bargain plans in the 2016 or 2017 Medicare Advantage tables. Allentown, shown above, is an example of a community in which all available plans have, and will have, a monthly premium over $100, an annual out-of-pocket spending maximum over $3,000, or both. (Photo: iStock)

1. Some states have no great Medicare Advantage bargain plans in the CMS tables now and will have none in 2017.

Only 16 states and Puerto Rico have Medicare Advantage plans in the 2016 or 2017 CMS county-level information data files with monthly premiums less than or equal to $100 per month and annual out-of-pocket maximums less than or equal to $3,000.

Here’s the list of states with no such plans:

• • Alabama

  • Alaska

  • Arkansas

  • Colorado

  • Connecticut

  • Delaware

  • Georgia

  • Hawaii

  • Indiana

  • Iowa

  • Kansas

  • Kentucky

  • Louisiana

  • Maine

  • Maryland

  • Massachusetts

  • Michigan

  • Mississippi

  • Montana

  • Nebraska

  • New Hampshire

  • North Carolina

  • North Dakota

  • Ohio

  • Pennsylvania

  • Rhode Island

  • South Carolina

  • South Dakota

  • Tennessee

  • Vermont

  • Virginia

  • West Virginia

  • Wyoming

Pennsylvania is the highest-population state on this list that has no low-premium, low out-of-pocket spending maximum plans listed in the CMS data files.

Related: 11 Medicare mistakes to avoid 

Issuers are using the cost plan structure to expand their menu of bargain Medicare Advantage plans in Minnesota. Minneapolis, a city in Hennepin County, Minnesota, will have two bargain cost plans, up from one this year. (Image: Thinkstock)