Medicare Advantage Premiums Drop 14% for 2020 Open Enrollment

September 25, 2019 - CMS projects that Medicare Advantage and Part D premiums are an estimated 14 percentage points lower than 2019 premiums, dropping from $26.87 to approximately $23.00 this 2020 open enrollment season.

This makes them the lowest premiums since 2007, the agency said.

 “These dramatically lower costs in Medicare Advantage and Part D, thanks to President Trump’s leadership, means that we are putting dollars back into the pockets of our seniors,” said CMS Administrator Seema Verma.

The projected 2020 premium represents a 23 percent drop from 2018 premium levels.

The agency also noted that plan choices have multiplied, benefits have expanded, and Medicare Advantage enrollment is rising.

READ MORE: Medicare Part D Premiums Continue to Decrease, CMS Says

Medicare Advantage beneficiaries will have 1,200 more plans to choose from in 2020 than they did in 2018, with a 49 percent increase in plans per county since 2017. Between 2019 and 2020, the average number of plans per county will rise from 33 plans to 39.

CMS anticipates that Medicare Advantage enrollment will hit a record of 24.4 million beneficiaries. This represents over 40 percent of the overall Medicare population and a 30.6 percent increase from 2017 enrollment.

These figures are good news for taxpayers, CMS said. The 13.5 percent drop in Medicare Advantage and Part D premium costs will generate a total of $6 billion in Medicare premium subsidies for taxpayers over the past three years. The decline also has saved Medicare Advantage and Part D beneficiaries $2.65 billion in premium costs since 2017.

These findings represent a good argument against the Medicare for All systems that have gotten recent industry and policymaker attention, said HHS Secretary Alex Azar.

“This proven record of success—decreasing premiums in both Medicare Advantage and Medicare Part D—contrasts with proposals for a total government takeover of healthcare, which would destroy options such as Medicare Advantage that seniors increasingly choose,” Secretary Azar said in the press release.

READ MORE: AHIP: Proposed Auditing Rule Would Harm Medicare Advantage Plans

“Proposals for more government through Medicare for All or a public option, would only harm the progress we have made to protect and strengthen the Medicare program for future generations,” Administrator Verma agreed.

Verma echoed those sentiments at the Medicare Advantage Summit earlier this year.

“What works in the Medicare program is Medicare Advantage – because plans are competing on the basis of cost and quality, driving towards value and increasing choices for beneficiaries,” Administrator Verma said at the July summit.

“As head of the nation’s largest insurer—Medicare, Medicaid, and the Obamacare exchanges—I see the day to day challenges of government-run programs, and am deeply concerned about the proposals we have seen to upend healthcare in America, particularly Medicare for All and the public option,” she added.

While CMS declared Medicare Advantage a success and superior to single payer healthcare systems, other policymakers in Congress are not convinced.

READ MORE: Digital Payments May Help Individual Market Premium Collections

Senator Bernie Sanders, a 2020 Democrat presidential candidate and proponent of the single payer healthcare reform proposal known as Medicare-for-All, along with five other Democrat senators recently confronted Administrator Verma regarding what they viewed as inefficient oversight of Medicare Advantage.

In a letter addressed to Administrator Verma, the senators wrote that an HHS payment accuracy report revealed Medicare Advantage plans have been overpaid and urged action.

“In many cases, CMS has known for years about the tendency for some MA plans to overbill the government yet, despite this, CMS has taken little to no action to course correct. It is critical that CMS act immediately to recoup these overpayments and prevent future overbilling by MA plans,” the senators wrote.

Six areas drew the senators’ attention. First, they questioned CMS’s plan to rectify overpayment to Medicare Advantage plans and why plans that repeatedly fail to observe certain regulations have not been forced to comply. Specifically, those regulations include making provider directories available and disclosing encounter data about services rendered to Medicare Advantage plan beneficiaries.

The senators also critiqued CMS oversight more generally. They noted that audits by the Government Accountability Office, Office of the Inspector General, and CMS itself have found denials of care, payment, and unhealthy performance among Medicare Advantage plans. The letter asked whether Medicare Advantage denial rates and performance issues will be published publicly and requests an explanation.

The senators also were dissatisfied with the Medicare Advantage star ratings, saying they did not reflect plans’ quality.

Lastly, they requested information about CMS’s activities surrounding open enrollment regarding advertising and tools that may steer enrollees toward Medicare Advantage plans.

“While we recognize that oversight and contract enforcement require resources and that it can be challenging to undertake this work, it is past time for CMS to engage in regular oversight and enforcement of MA plans to ensure overpaid taxpayer dollars are recouped in a timely manner and MA plans are held accountable for their deficiencies,” the senators concluded. “If there are ways Congress can better support CMS as it works to address these challenges, we stand ready to help.”

With open enrollment starting on October 15, if CMS plans to comply with the senators’ suggested changes they will need to act quickly.