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- The average Medicare Advantage premium is projected to fall almost 8% in 2023 to $18 a month, CMS announced Thursday. The decline follows another 10% reduction in average MA premiums from 2021-2022.
- Enrollment in the popular Medicare Advantage plans, where private health insurers cover Medicare Parts A and B benefits and often offer additional benefits, is expected to rise again in 2023. Projections indicate enrollment will reach 31.8 million people next year, CMS said.
- A value-based care model that CMS is testing through Medicare Advantage is also on track to expand in 2023. Enrollment in the Value-Based Insurance Design model, which gives MA plans more flexibility in coverage and payments in order to reduce spending, is expected to increase 24% next year.
Average premiums paid by Medicare Advantage enrollees have been declining since 2015, reflecting lower premiums for local PPOs and HMOs that cover a growing share of beneficiaries, a Kaiser Family Foundation analysis found.
Medicare Advantage plans now cover 28.4 million people, or almost half of the eligible Medicare population, KFF calculates.
Enrollees like the plans because of their affordable premiums, prescription drug coverage and networks of preferred doctors, hospitals and pharmacies. The convenience of having all benefits consolidated under a single plan is another plus for beneficiaries.
CMS previously announced that average monthly premiums for Medicare Part B, which covers physician, outpatient and home health services and basic Part D prescription drug plans, are set to decline in 2023. Part B enrollees will pay $164.90 a month on average in 2023, down $5.20 from this year, largely due to lower-than-anticipated spending on the Alzheimer’s drug Aduhelm. Expected higher costs for the new drug pushed up 2022 premiums but did not materialize.
Part D premiums are expected to dip about 2% to $31.50 next year, paired with Medicare prescription drug savings through the Inflation Reduction Act, which will limit monthly cost sharing for insulin products to $35 and reduce costs for adult vaccines, among other changes.
Additionally, the Value-Based Insurance Design model, which tests the effect of customized benefits designed to better manage diseases and meet health-related social needs like food insecurity and social isolation, will be offered to a projected 6 million people, up from 3.7 million in 2022 and 1.6 million in 2021. The model will have 52 participating MA organizations in 2023, up from 34 in 2022 and 19 in 2021.