Zero-dollar health plans are bringing average Medicare Advantage premiums lower, continuing an ongoing trend, an eHealth reportfound.
eHealth surveyed over 4,200 Medicare beneficiaries who were eHealth consumers between October 12 and October 25, 2021.
The researchers found that the average Medicare Advantage premium was $4 per month for plan selections made in the first half of the 2022 open enrollment period, lower than both 2021, 2020, and 2019 open enrollment periods for the same timeframe.
The average premium has been substantially diminished due to the prevalence of zero-dollar premium Medicare Advantage plans. In the first half of the 2019 open enrollment period, zero-dollar premium health plans accounted for 76 percent of health plan selections. However, in the first half of the 2022 open enrollment season 86 percent of Medicare beneficiaries have selected zero-dollar premium plan.
The survey also found that stand-alone Medicare Part D drug plans are seeing a steady premium rate compared to the first half of the 2021 and 2020 open enrollment periods. The average premium for Medicare Part D drug plans was slightly higher in the first half of the 2019 open enrollment period, hitting $23 per month.
Not all selected Medicare plans saw a favorable trend in premiums. In the first half of 2022 open enrollment, average Medicare supplement plan premiums hit $172 per month. Medicare supplemental plans that were chosen in the first half of the open enrollment season saw an eight percent increase from 2021 to 2022.
This continued a trend spanning at least a couple of years. In 2019, average premiums of selected Medicare supplemental plans cost $146 per month in the first half of the open enrollment season.
However, the researchers noted that Medicare beneficiaries can enroll in Medicare supplement plans at other times of the year apart from the open enrollment period. This reality might affect final average premiums over the course of a year.
The survey also referenced some of the data from areportthat eHealth published previously in the same month. That previous report found that health insurance enrollees overall were most concerned about out-of-pocket healthcare spending, covering premiums, and keeping their providers in-network.
The eHealth survey noted that Medicare beneficiaries also were primarily concerned about out-of-pocket costs, with 39 percent citing this as their biggest concern related to their Medicare coverage.
However, there was variation regarding how big of a concern this was for Medicare beneficiaries based on the type of Medicare coverage in which they were enrolled. Among Medicare Advantage, Medicare supplement plans, and Medicare Part D prescription drug plans, Medicare Advantage members were the most likely to have out-of-pocket cost concerns.
In contrast, beneficiaries inMedicare supplement planswere the least likely to face affordability barriers. Slightly less than a third of beneficiaries in these plans reported that out-of-pocket healthcare spending was their greatest Medicare coverage concern.
These results related to members’ experiences of out-of-pocket healthcare spending sync with previous research on the subject. Beneficiaries in Medicare supplemental coverage have fewer cost-related hurdles to overcome, a Kaiser Family Foundation issue briefestablished.
Although Medicare Advantage members were most likely to have concerns about out-of-pocket healthcare spending, only eight percent of Medicare Advantage beneficiaries found premiums to be their top concern.
The remainder of the 2022 Medicare open enrollment season will show whether these trends continue and will provide a fuller picture of members’ priorities.
Dual eligible beneficiaries enrolled in Medicare Advantage plans sought preventive care more often and saw lower healthcare costs compared to beneficiaries in fee-for-service Medicare.
- Dual eligible beneficiaries were more likely to choose a Medicare Advantage plan over a fee-for-service Medicare plan, astudycommissioned by Better Medicare Alliance (BMA) found.
To understand the demographics, health outcomes, and healthcare spending trends among the dual eligible population, ATI Advisory analyzed data from the 2018 Medicare Current Beneficiary Survey and Cost Supplement File.
Researchers found that 44 percent of dual eligible beneficiaries were enrolled in Medicare Advantage compared to 35 percent who were enrolled in fee-for-service Medicare. Additionally, 23 percent of all Medicare Advantage members were dual eligibles whereas 17 percent of fee-for-service Medicare beneficiaries were dual eligibles.
Dual eligible beneficiaries who were enrolled in Medicare Advantage were more likely to have a usual source of care compared to beneficiaries enrolled in a fee-for-service Medicare plan, the report found. Medicare Advantage dual eligibles received preventive care services more often than fee-for-service dual eligibles as well.
In the past year, 42 percent of Medicare Advantage dual eligibles had a mammogram compared to 34 percent of fee-for-service dual eligibles.
Nearly 68 percent of Medicare Advantage dual eligible beneficiaries received a flu shot in the last year compared to 62 percent of dual eligibles on a fee-for-service Medicare plan. Medicare Advantage members were also more likely to have had their blood cholesterol measured than fee-for-service beneficiaries (92 percent and 84 percent, respectively).
Since dual eligible beneficiaries qualify for both Medicare and Medicaid, they typically have incomes that are near or below the federal poverty level. Dual eligibles are also more likely to identify as part of the Black or Latinx communities, compared to beneficiaries who are eligible for Medicare only.
Black beneficiaries and Latinx beneficiaries comprised more than half of all dual eligible beneficiaries enrolled in Medicare Advantage special needs plans (SNP), accounting for 29 percent and 27 percent of the overall dual eligible population respectively, the report noted.
Just over 40 percent of dual eligibles in a Medicare Advantage plan without SNP identified as part of the Black or Latinx communities, with the percentage dropping to 34 percent among dual eligibles in fee-for-service Medicare. In contrast, only 13 percent of Medicare-only beneficiaries identified as Black or Latinx individuals.
Dual eligible beneficiaries tend to have complex medical and social needs, another reason why they may flock toward Medicare Advantage instead of fee-for-service Medicare. Medicare Advantage and SNP canprovide supplemental benefitsthat are tailored to members’ specific health conditions.
BMA found that 72 percent of dual eligible beneficiaries enrolled in a Medicare Advantage SNP reportedhaving three or more chronic conditionscompared to 56 percent of dual eligibles enrolled in fee-for-service Medicare. Th Medicare Advantage population without SNP fell in the middle, with 64 percent of dual eligible enrollees reporting three or more chronic conditions.
“This latest research is a powerful testament to Medicare Advantage’s capacity to meet the needs of an increasingly low-income, at-risk, and diverse population,” Mary Beth Donahue, president and chief executive officer of BMA, said in apress release.
“While dual eligible beneficiaries in Medicare Advantage often present even more complex needs than their FFS Medicare counterparts, Medicare Advantage is nonetheless delivering better results in pairing beneficiaries with a usual source of care and providing them with needed preventive services.”
Dual eligibles in a Medicare Advantage SNP saw an average annual premium of $279 and dual eligibles in Medicare Advantage without SNP had a premium of $304. Meanwhile, fee-for-service dual eligibles saw an average annual premium of $435, the report revealed.
Dual eligible beneficiaries in Medicare Advantage saw lower average annual out-of-pocket costs as well, amounting to $1,112 for Medicare Advantage SNP beneficiaries, $1,960 for Medicare Advantage without SNP, and $2,647 for fee-for-service dual eligible beneficiaries.
“Policymakers should ensure the Medicare Advantage program is able to continue providing critical cost protections, targeted and high-touch care models, and supplemental benefits that are particularly meaningful to medically, functionally, and socially complex beneficiaries,” the report concluded.
Many seniors chose not to make a shift during the 2022 open enrollment season because they did not think they could find a health plan better than their current one.
Nearly nine out of every ten American seniors had not changed Medicare plans with less than a month left in the 2022 open enrollment season, according to aMedicareGuide.com survey.
MedicareGuide.com surveyed over 2,280 seniors over the age of 65 from November 15 through November 17, 2021. At the time of the survey, there were three weeks left in the 2022 Medicare open enrollment season.
“Historically, most beneficiaries don’t change plans, but coverage and cost can change significantly year to year, especially now because of Covid,” said Jeff Smedsrud, the co-founder of HealthCare.com, MedicareGuide’s parent company. “It is becoming easier to use online tools to review your plan and find potential savings. It pays to shop around.”
Seniors reported that they were not considering switching health plans. More than two-thirds had not reviewed their health plans and 88 percent of beneficiaries had not changed their coverage at the time.
Seniors noted a handful of reasons why they chose not to change Medicare Advantage plans. Most seniors who did not change health plans (67 percent) said that they could not find a better health plan than the one that already covered them.
Nearly one in five seniors said that they did not change health plans because they would not have saved on their premiums. Cost seemed to be a major factor in seniors' health plan selection process in 2022.Zero-dollar premium Medicare Advantage planshave gained in popularity, driving down the average health plan premium to $4 per month.
However, most beneficiaries who did switch plans and found a plan with a lower premium (85 percent) saved between $0 and $50 each year.
Another 18 percent of seniors did not change health plans because they found the process overwhelming. Lack of healthcare literacy and general confusion about the health plan selection process are perennial problems during open enrollment season. According to a survey commissioned by GoHealth, almost four in ten beneficiariesfound Medicare resources confusing.
Eleven percent of all respondents switched to Medicare Advantage from Original Medicare, primarily due to Medicare Advantage’s benefits.
The hesitance to change health plans is not new. Most beneficiaries have never switched health plans before (66 percent). Eighteen percent reported that they had changed health plans one time.
Even more beneficiaries (85 percent) reported that they did not change their prescription drug health plan during the 2022 open enrollment season. For 9 percent of those who changed their prescription drug plans, pricing was the primary driver.
Seniors also prioritized supplemental benefits. Fifteen percent of respondents were looking for dental, hearing, and vision benefits, while 13 percent sought improved drug coverage.
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In recent years, CMS has made dramatic changes to the regulation of Medicare health benefits. In this blog we discuss the emphasis the agency has placed on flexibility. Two January reports from Deft Research -- 2021 Medicare Shopping and Switching and The National Medsupp+OMO to MAPD Study-- illuminate the value of flexibility in Medicare benefit design. Clients of the second study receive an online market simulator capable of testing the competitiveness of benefit designs with an unlimited number of scenarios. The use of this tool has helped many MAPD's make the decision to change and expand the design of their benefits.
In 2018 and 2019, the Centers for Medicare & Medicaid Services (CMS) expanded the types and flexibility of supplemental benefits that Medicare Advantage (MA) organizations can offer to their enrollees. The changes are dramatic because they demonstrate a shift in the underlying principles of health insurance regulation.
The new CMS approach emphasizes flexibility over equality.
Historically, health insurance regulators approached consumer protection through the principle of equality. Under Equality all MA's had to offer substantially the same benefits to all of the enrollees of a particular plan. This was to ensure all enrollees have access to the same care and that nobody was treated inequitably.
Under the new approach, the principle of flexibility depending on need is emphasized. Not all benefits have to be offered to all enrollees of a plan -- for instance, the cost sharing for diabetics can be reduced without similar reductions being offered to other consumers. Under Flexibility supplemental benefits can be organized for the specific needs of individuals, rather than defined as one-size fits all. For example, in-home services can be delivered by medical or non-medical personnel depending on the need.
According to an analysis by Milliman, for the 2021 plan year, expanded supplemental benefits are included in 575 MA plan benefits. This is a significant increase from 351 plans offering expanded benefits in 2020. We view the increase as evidence that MA plans are a responsive vehicle for designing the delivery and financing of expanded benefits.
How This Shows Up When Seniors Switch Health Plans
Whether 2020 MA plans offered or did not offer supplemental benefits is related to whether seniors switched from plans during last fall's Annual Election Period (AEP). The chart below provides evidence from Deft Research's2021 Medicare Shopping and Switching Study.
The chart compares percentages of seniors who switched health plans for 2021 with those who did not. We note that the most flexible benefit, a benefit allowance, sits at the top of the chart as most often noted by switchers as missing. This supports the idea that a flexible allowance which provides some assurance of extra coverage for needs that cannot be foreseen, is highly valued by consumers. Flexibility is linked to trust and both are fundamental to the value perception.
More than 3 million Medicare Advantage beneficiaries chose plans for the 2021 coverage year that provide additional supplemental benefits for chronic illnesses, a major increase over the more than 1 million that signed up in 2020, a new analysis found.
The analysis, released Friday by consulting firm Avalere Health, also found the number of enrollees in MA plans that offer such benefits increased this year compared to 2020. The analysis comes as the Biden administration is likely to make social determinants of health a major priority, with supplemental benefits in MA plans an area in which to address those issues.
“Stakeholders should consider engaging with the Biden administration around their early experiences with [supplemental benefits for the chronically ill] and any policy change that could facilitate their wider adoption,” the analysis said.
The analysis found that this year, 787 MA plans are offering special supplemental benefits that range from meal delivery to pest control and virtual visits. The plans represent 16% of all plans that Avalere analyzed.
“Overall, in 2021, 15% of enrollees in non-employer MA plans are enrolled in plans offering [supplemental benefits], as compared to 6% in 2020,” Avalere said.
The analysis also found that 86% of the total Medicare beneficiary population live in a county with at least one MA plan that offers one of the benefits.
Plans could start to offer the supplemental benefits that were not specifically health-related starting in 2020. This year, plans started offering new benefits like prescription deliveries for those who must stay home due to the COVID-19 pandemic.
“However, the number of plans offering these benefits—and associated enrollment—are relatively small compared to the most prevalent benefits,” the firm said.
The most popular supplemental benefit was meals, with 356 plans employing the benefit. The second-most popular was food and produce with 336 plans, and pest control was a benefit offered by 200 plans.
Avalere looked at the plan benefit package data from the Centers for Medicare & Medicaid Services in 2020 and 2021.
Out of 67.7 million Medicare beneficiaries in the United States in 2020, roughly 24 million (36%) are enrolled in a Medicare Advantage plan, which represented a 9% year-over-year increase. By 2030, the Congressional Budget Office projects that 51% of all Medicare beneficiaries will be enrolled in a Medicare Advantage plan.
And with the COVID-19 pandemic continuing to ravage the nation, it looks like Medicare Advantage plans will become even more popular according to findings from a recent study conducted by MedicareAdvantagePlans.org.
As mentioned earlier, Medicare Advantage plans are becoming in vogue because they are cost-effective, flexible, and will oftentimes include Part D prescription drug coverage so the three most populated answers found in the pie chart come as no surprise.
The next most-populated answer, “I like the supplemental benefits that are included in a Medicare Advantage plan,” is where things get more interesting, especially considering the pandemic we currently find ourselves in.
COVID-19 Related Supplemental Benefits a Big Reason For Increasing Popularity of Medicare Advantage Plans
Supplemental benefits are a big reason why many Americans are switching to Medicare Advantage plans.
They do not need to be provided by Medicare providers or at Medicare-certified facilities, but only need to abide by the rules laid out by a specific Medicare Advantage plan. Popular supplemental benefits include vision, dental, over-the-counter benefits, and fitness.
Supplemental benefits have become such an important selling point for Medicare Advantage plans that there will be a 64% year-over-year increase in the number of Medicare Advantage plans that are offering such benefits in 2021.
And as a result of the coronavirus pandemic, 34% of Medicare Advantage plans are now offering COVID-19-related supplemental benefits in 2021, which includes covering costs for things like testing, PPE, and care packages.
Amongst our survey respondents that indicated supplemental benefits as the reason they are enrolling in a Medicare Advantage plan for 2021, here’s how many cited COVID-19-related supplemental benefits specifically.
Other than the common supplemental benefits, like dental and vision, that respondents cited, “COVID-19 related supplemental benefits” was one of the most populated answer choices as 35% of respondents that were drawn to a Medicare Advantage plan cited this type of supplemental benefit specifically.
In regards to how the coronavirus pandemic is shaping the Medicare Advantage plan market, it’s also noteworthy that 27% of applicable respondents pointed to a telehealth supplemental benefit.
With people trying to limit their exposure to potential COVID-19 hotspots, like a doctor’s office, the telehealth industry has boomedso it’s easy to understand why many Medicare Advantage beneficiaries have become more attracted to this supplemental benefit.
Medicare Advantage plans were already surging in popularity, but it looks like the coronavirus pandemic will further catalyze that surge because beneficiaries can likely have their COVID-19 related costs covered through specific supplemental benefits.
Many Beneficiaries Are Switching From Original Medicare Plans to Medicare Advantage Plans
The data shows Medicare Advantage plans are becoming more and more popular with each passing year.
Compared to original Medicare plans, Medicare Advantage plans can be more cost-effective, while still offering prescription drug coverage and a variety of supplemental benefits.
And according to our survey data, eligible Americans want to experience the possible benefits of a Medicare Advantage plan for themselves as many are switching from original Medicare coverage in 2020 to a Medicare Advantage plan in 2021.
Nearly half of all 2021 Medicare Advantage beneficiaries, 45% to be exact, are making the switch from their original Medicare coverage in 2020.
Further, 52% indicated they are not making the same switch, which likely indicates they were happy with their Medicare Advantage plan in 2020 and want to keep it for the new year.
When looking at this data and other external sources, all signs point to Medicare Advantage plans continuing to increase in popularity as eligible Americans look for more flexible coverage options outside of what original Medicare coverage can offer.
Are Medicare Advantage Beneficiaries Simply Doing More Research?
A recent story by The New York Times discussed how the Medicare marketplace has become more competitive as of late, especially with the rollout of Medicare Advantage plans, and that enrollees would benefit the most by doing their research and pricing out the market.
However, the story cited a recent study that found 57% of Medicare enrollees don’t review or compare their coverage options annually, including 46% who “never” or “rarely” revisit their plans.
This isn’t great news when you think about all the consumers out there that are possibly missing out on Medicare Advantage benefits because they either don’t know what they are or understand how it could be better (or more cost-effective) for them.
Interestingly, when we asked our Medicare Advantage enrollees if they’ve done their research, here’s what we found.
As it turns out, 65% of respondents indicated they always compare all available options, while another 26% said they did a brief amount of research.
Only 7% said they never or rarely do any research before enrolling.
What can be drawn from this? 91% of Medicare Advantage beneficiaries do some amount of research before selecting their plan while the New York Times story found 57% of all Medicare enrollees never did any research, so perhaps if every eligible consumer did their homework before enrolling we would have far more opting for a Medicare Advantage plan.
Is it possible that the benefits of Medicare Advantage plans so outweigh original Medicare coverage that all it takes is a bit of research to understand which option is generally more consumer-friendly?
The data from this report comes from an online survey administered by online survey platform Pollfish. The survey was created and paid for by MedicareAdvantagePlans.org. In total, 700 adult Americans that were eligible for Medicare in 2021 and enrolled in a Medicare Advantage plan for 2021 were surveyed on the questions found in this report. By using screener questions, we were able to find adult Americans that were eligible for Medicare in 2021 and enrolled in a Medicare Advantage plan in 2021.
Before enrolling in Medicare for 2021, did you review or compare your available coverage options before eventually enrolling in a specific program?
Yes, I always compare all available options. (65%)
I did a brief amount of research before enrolling. (26%)
No, I never or rarely do any research on my options before enrolling. (7%)
I’d rather not say. (1%)
Are you switching from another Medicare plan in 2020 to a Medicare Advantage plan in 2021?
I’d rather not say. (3%)
Why are you going with a Medicare Advantage plan in 2021?
I’ve had a Medicare Advantage plan before and prefer it. (35%)
I like that the Medicare Advantage plan includes prescription drug coverage. (29%)
It’s more affordable than a standard Medicare plan. (16%)
This is my first time hearing about Medicare Advantage plans and I like it. (8%)
I like the supplemental benefits that are included in a Medicare Advantage plan. (9%)
Other/None of the above (5%)
(If applicable)What specific supplemental benefits encouraged you to enroll in a Medicare Advantage plan? (SELECT ALL THAT APPLY)
COVID-19 related supplemental benefits (testing, PPE, care package, etc.) (35%)
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Come Dec. 7 – the date AEP ends – many agents and advisors will take some well-deserved time off to recharge and reconnect with family and friends. But smart agents and advisors know that another important enrollment period starts on Jan. 1: the Medicare Advantage Open Enrollment Period (OEP).
It’s a simple step during the AEP process to ask clients the best ways to contact them for follow up. Make a note if they prefer a phone call, email or postal mail. Confirm and document their contact information and respect their decisions. Insurance professionals ensure their clients have the best coverage by keeping the lines of communication open. Developing a follow-up system is the best way for agents and advisors to make sure their client’s plan is working for them.
Agents and advisors also need to follow through with their commitments. Some insurance professionals think the burden is on clients to contact them if there are issues with a plan. Agents and advisors shouldn’t risk losing clients due to poor customer service and lack of follow up.
Check in with clients to ask if their current plan is filling their needs.
Did they receive their new plan I.D. card?
Are there any transition of care problems?
Do they want to review plan benefits?
OEP, which runs from Jan. 1 to March 31 – is the time when Medicare beneficiaries enrolled in MA plans have the opportunity to make a one-time election to change their coverage. The change will take effect the first of the month after the plan receives the change request.
During OEP, the beneficiary can:
Switch to another Medicare Advantage Plan (with or without drug coverage).
Disenroll from the Medicare Advantage Plan and return to Original Medicare. The beneficiary will be able to join a Part D plan.
Agents and advisors need to be keenly aware that Centers for Medicare and Medicaid Services (CMS) has put in place rigid rules regarding the communications they can have with clients about OEP.
We are in the business of providing exceptional services to agents and advisors. It’s more than products and services. It includes giving you the valuable insights – such as contacting a client to make sure their plan is working for them. And, if necessary, use OEP as the time to help your clients change plans.