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:

Allentown, Pennsylvania

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. (Image: Thinkstock)

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)

2. The number of bargain Medicare Advantage plans included in the tables will increase in seven of the 16 states that have bargain plans this year.

Here’s how the counts will change in the states with increases:

    • California: to 31, from 24.

    • Florida: to 10, from 7.

    • Minnesota: to 261, from 87.
    • Missouri: to 77 from 68.

    • Oklahoma: to 44, from 27.

    • Oregon: to 18, from 15.

    • Wisconsin: to 6, from 0.

In Minnesota, the state with the biggest increase in bargain plans, carriers are using “cost plans” to offer more low-premium plans with low out-of-pocket maximums.

A Medicare Advantage cost plan is a Medicare Advantage plan for people who also have traditional Medicare Part A hospitalization coverage and Medicare Part B outpatient and physician services coverage. The enrollee can choose between using the cost plan to see the providers in the cost plan’s provider network and using traditional Medicare benefits to see providers outside the cost plan’s network.

In two states, the number of bargain plans will stay the same in 2017: Nevada will continue to have six bargain plans, and New York state will continue to have five.

Related: 10 Medicare facts for agents who know everything

The plans available in Omaha, in Douglas County, have premiums over our Medicare Advantage bargain-plan limit or out-of-pocket spending maximums over the limit. (Photo: iStock)

The Medicare Advantage plans available in Omaha, the Douglas County, Nebraska, city shown above, will all have premiums over $100 per month, out-of-pocket spending maximums over $3,000, or both. (Photo: iStock)

3. The number of bargain Medicare Advantage plans in the tables will fall in seven of the 16 states that have bargain plans this year.

Here’s what will happen to bargain plan counts in the states with decreases:

    • Arizona: to 1, from 2.

    • Idaho: to 22, from 50.

    • Illinois: to 27, from 64.

    • Nebraska: to 0, from 3.

    • New Mexico: to 16, from 20.

    • Texas: to 46, from 57.

    • Washington state: to 14, from 18.

In Illinois, the state with the biggest drop in the number of bargain plans, the culprit seems to be an increase in annual out-of-pocket spending maximums. In Cook County, for example, a number of plans have monthly premiums under $100, but only one Cook County plan in the data file has an annual out-of-pocket maximum less than or equal to $3,000.  

Related: UnitedHealth: Government plans look good

Los Angeles will offer 10 bargain Medicare Advantage plans in 2017. Filtered using our bargain screening criteria, San Francisco, shown above, will have none. (Photo: Thinkstock)

Los Angeles will offer 10 bargain Medicare Advantage plans in 2017. Filtered using our bargain screening criteria, San Francisco, shown above, will have none. (Photo: Thinkstock)

4. Access to bargain plans continues to vary dramatically by county.

The CMS data file puts an issuer’s Medicare Advantage plan for each county on a separate in the database.

That means each bargain plan described here is available in just one county in its state.

New York state, for example has five bargain plans in the data file, and 62 counties. People in 57 of the counties have to pay more than $100 per month for coverage, accept having an annual out-of-pocket spending maximum over $3,000, or accept having both a high monthly premium and a high spending maximum.

In California, Los Angeles County residents will be able to choose from a list of 10 Medicare Advantage bargain plans. San Francisco residents will see no bargain plans on their menus.

Related: Medicare enrollment period slides to an end

Puerto Rico faces severe financial problems, but many of its Medicare Advantage plans will continue to offer low premiums and low out-of-pocket spending maximums. (Image: Miro Novak/Thinkstock)

Puerto Rico faces severe financial problems, but many of its Medicare Advantage plans will continue to offer low premiums and low out-of-pocket spending maximums. (Image: Thinkstock)

5. By mainland U.S. standards, many Medicare Advantage plans in Puerto Rico will be bargains.

Puerto Rico is going through a severe financial crisis and facing complaints about the state of its health care system, but, for people in the market for Medicare Advantage plans who are mainly interested in premiums and out-of-pocket costs, bargains abound: 234 of the Medicare Advantage plans have monthly premiums under $100 and annual out-of-pocket spending maximums under $3,000 this year, and the same number will be bargains next year.

Related:

12 Medicare facts you need to know for the current open enrollment period

Median Medicare Advantage out-of-pocket max to rise 3.5%

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