Premiums for Medicare Advantage plans are expected to decline next year by 14% compared with 2019 as plans aim to offer more choices, according to the Centers for Medicare & Medicaid Services (CMS).
CMS Administrator Seema Verma touted the figures during a speech before insurance industry group America’s Health Insurance Plans Medicare conference Tuesday as evidence of the Trump administration’s market-based approach to healthcare.
“Our new policies are increasing competition among Medicare Advantage (MA) plans, and this competition is creating more choices for consumers—nearly 1200 new plans have been introduced over the last two years,” she said.
The average monthly premium for a MA plan will be $23 in 2020, a decline from the average premium of $26.87 in 2019.
Since 2017, the average monthly premium for MA plans has decreased by nearly 30%, and 2020's average premium is likely to be the lowest since 2007, CMS said in a release. The agency added that the number of plan choices per county increased from about 33 plans in 2019 to 39 plans in 2020.
“This represents an increase of 49% since 2017,” CMS said.
Overall, CMS projects that 24.4 million Medicare beneficiaries out of approximately 60 million will sign up for MA next year. That is an increase from the 22.2 million currently enrolled in the program.
The Trump administration aimed to take credit for the decline by noting that CMS had adopted several MA-friendly policies aimed at driving competition. These include streamlining the government approval of MA and Part D marketing materials and expanding the number of benefits an MA plan can offer, such as telehealth.
Last month, CMS also rolled out a new plan finder for Part D, MA and traditional Medicare plans. However, MA insurers say the administration needs to offer more flexibility to offer supplemental benefits.
Insurers and experts told researchers from think tank Urban Institute that CMS didn’t provide additional funding for supplemental benefits that target social determinants of health. Without that funding, plans are reluctant to try supplemental benefits such as meal delivery or small home improvements that could lead to lower healthcare costs, the report said.
Medicare’s 2020 open enrollment for traditional and MA plans begins Oct. 15 and ends Dec. 7.
Verma said the news is a “testament to what can happen when government gets out of the way and allows private market competition to flourish.”
Verma sought to make a stark contrast of a market-based system with “Medicare for All,” some versions of which would eliminate private insurance with a government-run system.
The latest MA premiums for 2020 are a “testament to what can happen when government gets out of the way and allows private market competition to flourish,” she said.
CMS and the Department of Health and Human Services have been launching broadsides at Medicare for All since it has grown in popularity among congressional Democrats and 2020 hopefuls.