$0 Premium Plans Are Pushing Medicare Advantage Premiums Lower

November 24, 2021 - Zero-dollar health plans are bringing average Medicare Advantage premiums lower, continuing an ongoing trend, an eHealth report found. 

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 a report that 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 in Medicare supplement plans were 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 brief established.

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.