Medicare Advantage projected annual premium decreases for 2023 plans

As inflation spirals and the price of basic goods and services continues to rise, the cost of one popular program affecting 30 million seniors and people with disabilities is steadily going down.

The projected average premium for 2023 Medicare Advantage plans declined nearly 8%, to $18 a month, from the previous year’s monthly $19.52, according to the Centers for Medicare & Medicaid Services. This follows a 10% decline in premiums in 2021.

Why MA premiums are going down isn’t exactly clear, but it appears to be the result of booming popularity and increased efficiency, according to AHIP, the trade association of health care insurers that offer Medicaid Advantage coverage. President Biden’s Inflation Reduction Act may have helped this year as well.

Affordability and access improve

“These lower premiums, in addition to the lower average basic monthly premium for Part D plans that was previously announced, mean that health insurance providers are doing even more to improve affordability and access for Americans,” said Matt Eyles, AHIP president and CEO.

Medicare Advantage, sometimes called Medicare Part C or MA, provides Medicare benefits thorough private-sector health insurers. Nearly half of all Medicare beneficiaries have chosen coverage under Medicare Advantage plans, more than double the number 10 years ago.

“The MA program is an enormously successful example of a public-private partnership that delivers tremendous value for America’s seniors and people with disabilities,” said Eyles.

At about the same time, however, CMS released the 2023 star ratings for MA and Part D plans that showed record declines in MA plans with high star ratings. CMS said 51% of MA plans with drug coverage would have a four-star rating or higher in 2023, a drop compared with 68% for 2022. It also found that 72% of people currently in an MA drug coverage plan are enrolled in one with four stars or higher, a drop from 90% for 2022.

The star ratings help prospective enrollees differentiate plans amid a highly competitive marketplace. They also determine the amount of quality bonuses plans can receive. Medicare 2023 open enrollment starts Oct. 15.

Several reasons for the decline in star ratings included the removal by CMS of a disaster provision put in place to help plans respond to the COVID-19 pandemic.

“The ongoing and continuing effects of factors such as COVID-19, along with recent CMS methodological and measurement changes, may have affected the 2023 Star Ratings results,” Eyles said. “Even so, the majority of Medicare Advantage enrollees are projected to be covered by high performing plans.”

AHIP’s Eyles recently sent an 80-page response to CMS’ request for information on how the Medicare program could be improved. In it, he extolls the virtues of Medicare Advantage saying it delivers better services, better access to care, and better value.

Enrollees more diverse

“Enrollees in MA are more racially and ethnically diverse and are more satisfied with their coverage than those in the original Medicare program,” Eyles wrote. “The continued growth of the program is a testament to the tremendous value MA offers to all enrollees, but especially those with chronic illnesses who require care management and those with low incomes who rely on MA’s access to additional benefits at little or no cost.”

Despite the program’s perceived successes, there have been issues cited with Medicare Advantage. A recent New York Times review found a number of major health providers have inflated profits by billions of dollars by exploiting the program.

Elyse provided five recommendations on how the government could improve “equity, access, innovation, and value” in Medicare Advantage programs.

• CMS should support efforts MA efforts to improve health equity and social risk factors through additional flexibility and improved data collection.
• CMS should expand access to MA coverage (including in rural and medically underserved areas) to ensure everyone has access to comprehensive benefits that far exceed what is available in original Medicare.
• AS MA is much more cost-effective and provides higher quality care than original Medicare, CMS should consider targeted improvements to the payment and quality components to build on these successes.
• Improvements to the collection and exchange of data is critically important for numerous health policy goals.
• Improvements in CMS’ regulatory process are urgently needed because of the tremendous growth of the MA programs.

“Americans deserve a strong and stable MA program based on person-centered, high-quality coverage and care,” Eyles wrote. “Our recommendations and … detailed comments are designed to deliver just that.”

Doug Bailey is a journalist and freelance writer who lives outside of Boston. He can be reached at [email protected].

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Doug Bailey is a journalist and freelance writer who lives outside of Boston. He can be reached at [email protected].