The eHealth’s annual Medicare Index Report shows a 50% rise in monthly premiums for Medicare Advantage plans from 2022 to 2023, along with a 45% rise for Part D plans. The average premium for Medicare Advantage plans was $9 per month in 2023, with fewer beneficiaries opting for zero-dollar premium plans. Conversely, Medicare Supplement premiums fell for the first time since 2018. The research mentions that the coverage of new, expensive drugs may have an impact on premium increases.
Medicare is a federal program that provides health insurance to people aged 65 and older, as well as those with certain disabilities or chronic conditions. Medicare Advantage and Part D are two programs that provide additional coverage options to Medicare beneficiaries. In this article, we will be discussing the findings of eHealth’s sixth annual Medicare Index Report, which provides data on plans selected by eHealth consumers during Medicare’s 2023 Annual Enrollment Period.
Medicare Advantage
Medicare Advantage is a private health insurance alternative to traditional Medicare offered by insurance companies that contract with the federal government. According to the eHealth report, the average monthly premium for Medicare Advantage plans grew by 50 percent from 2022 to 2023, increasing from $6 to $9 per month. While this marks the second year in a row that premiums have increased, the average premium is still relatively low due to high enrollment in zero-dollar premium plans.
In 2023, 84 percent of Medicare Advantage plans selected by eHealth consumers had a zero-dollar monthly premium. This figure is down slightly from 87 percent in 2022 but is up significantly from 63 percent in 2018. The availability of zero-premium Medicare Advantage plans has been a major enrollment driver over the past decade, particularly for seniors on a fixed budget.
However, the eHealth report suggests that the market may be fully saturated with zero-dollar premium plans as more beneficiaries select Medicare Advantage premium-bearing plans that provide lower out-of-pocket costs. While Medicare Advantage satisfaction remains high, financial barriers may create friction for some beneficiaries. Those with Medicare Advantage were more likely to have lower incomes and more limits on what they could afford in premiums and out-of-pocket expenses compared to Medicare Supplement beneficiaries.
Part D
Medicare Part D is a prescription drug benefit that provides coverage for prescription drugs. Similar to the trend in Medicare Advantage premiums, the average monthly premium for Part D plans also rose by 45 percent, increasing from $22 in 2022 to $32 in 2023. Part D premiums increased for the second year in a row, and the $32 monthly premium recorded by eHealth is the highest in the previous five years.
The coverage of pricey new drugs is one of several variables that may have an impact on the rise in Part D premiums. As a result, beneficiaries may need to pay more out of pocket for their prescription drugs.
Medicare Supplement
Medicare Supplement Insurance, also known as Medigap, provides additional coverage for Medicare beneficiaries and can protect them from out-of-pocket costs not covered by Medicare. The eHealth report found that after reaching $178 per month in 2022, Medicare Supplement premiums fell to $173 per month in 2023, marking the first time since 2018 that premiums decreased.
The average deductible changes for Medicare Advantage, Part D, and Medicare Supplement plans were the opposite of premium changes. The average deductible for Medicare Advantage plans declined from $121 in 2022 to $103 in 2023, marking a 15 percent decrease. The average deductible for Part D plans decreased from $427 to $289 from 2022 to 2023, or a 9 percent reduction. Meanwhile, the average deductible for Medicare Supplement plans was $241 in 2023, up 33 percent from $181 in 2022.
