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Average 2022 Medicare Advantage Premiums Fall 10%

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What You Need to Know

  • The Centers for Medicare & Medicaid Services predicts that Medicare Advantage enrollment will increase to 29.5 million next year.
  • About 14 million of the 63 million people on Medicare use private supplement insurance policies to fill gaps in traditional Medicare coverage.
  • The 2022 average monthly premium will be the lowest in 15 years, said Mary Beth Donahue of the Better Medicare Alliance

Instead of increasing because of the effects of the COVID-19 pandemic on health care costs, typical Medicare Advantage plan premiums are shrinking.

The average monthly premium for a Medicare Advantage health plan will fall to $19 per month in 2022, down 10%, from $21.22, this year.

The average monthly premium for a Medicare Part D prescription drug plan will increase to $33, up from $31.47.

The Centers for Medicare & Medicaid Services, the division of the U.S. Department of Health and Human Services that runs the Medicare Advantage program, is predicting that enrollment in the program will increase to 29.5 million next year, from 26.9 million this year.

CMS has posted county-by-county Medicare Advantage plan cost data on its website, along with a summary.

Medicare Advantage Basics

The Medicare Advantage program offers private health insurers a chance to provide health plans that serve as an alternative to traditional Medicare Part A hospitalization coverage and Medicare Part B outpatient and physician services coverage.

CMS uses a bidding process to get the issuers to compete based on monthly premiums and annual out-of-pocket spending spending limits. The issuers provide the coverage in exchange for a combination of subsidy payments from CMS and premium payments from the enrollees.

The annual enrollment period for Medicare Advantage policies and Medicare Part D coverage is set to start Oct. 15 and run until Dec. 7.

About 14 million of the 63 million people with Medicare coverage use private Medicare supplement insurance policies to fill gaps in traditional Medicare coverage. A different open enrollment period system applies to those policies.

The current Medicare annual enrollment period will be the first shaped by the administration of President Joe Biden.

The Cost Data

The Medicare Advantage cost spreadsheets for 2022 coverage have 58,689 different entries, with a median monthly premium of zero, a median Part D deductible of $75, and a median annual out-of-pocket spending maximum of $5,500.

The comparable spreadsheet for 2021 shows 64,632 entries, a median of monthly premium of $9.60 and a median annual out-of-pocket spending maximum of $5,500.

For 2022, the median monthly premium at a plan with a premium over zero will be $45, the median Part D deductible will be $195, and the median out-of-pocket spending maximum of $5,500.

At the 2022 plans with no monthly premium, the median deductible will be zero, the average deductible will be $106, and the median out-of-pocket spending maximum will be $5,900.

Reactions

Members of Congress are talking about proposals that could make the current version of Medicare, including the Medicare Advantage program, available to more people or that could eliminate the current program and replace it with something else.

Matt Eyles, the president of America’s Health Insurance Plans, and Mary Beth Donahue, the president of the Better Medicare Alliance, welcomed the 2022 Medicare Advantage premium announcement as a sign of the success of the current program.

“Medicare Advantage offers all the benefits covered by original Medicare — such as preventive health screenings and vaccines, physician visits and hospital care — while also offering additional benefits like capping out-of-pocket cost,” Eyles said in a comment on the announcement. “Medicare Advantage is the leading example of a public-private partnership that works.”

Donahue noted that the 2022 average monthly premium will be the lowest in 15 years.

About half of Medicare Advantage plan enrollees live in households with income below 200% of the federal poverty level, compared with 39% of the Medicare enrollees who sign up for traditional Medicare coverage, Donahue said.

(Image: Diego M. Radzinschi/ALM)