eHealth: Medicare Advantage premiums drop 33% during latest enrollment period

Medicare Advantage (MA) and Part D applications were up 87% during the open enrollment period between January and March compared to the same period last year, according to a new report from eHealth.

The report looks at the costs and reactions from enrollees of Medicare’s latest open enrollment period. During the first three months of this year, the average MA premium dropped 33% from $12 to $8 from 2018, and average out-of-pocket limits decreased 11%. The average monthly premium for Part D coverage decreased during this time as well from $26 to $25.

Chris Hakim, senior vice president and general manager of Medicare for eHealth, said the company has been tracking the downward trend on average MA premiums for some time. It was noted in eHealth’s previous report at the year-end annual enrollment period as well.

“This may be a sign of strong competition and increased efficiency in the Medicare Advantage market,” Hakim told FierceHealthcare.

More than half of respondents (53%) used open enrollment as an opportunity to switch from one MA plan with prescription drug coverage to another plan also with drug coverage.

RELATED: MA outperforms traditional Medicare in cost for dual eligibles

During the time period, average deductibles for MA plans with prescription drug coverage decreased from $151 to $132, but deductibles for Part D plans increased from $292 to $308.

Currently, a person enrolled in an MA plan can leave the plan and return to original Medicare or join another Advantage plan during open enrollment. Prior to 2018, enrollees could not switch to a different MA plan during those months. Now that midyear options for enrollment are available, Hakim notes that there are several factors that might lead to more plan swapping among MA enrollees.

For example, Hakim notes that a lot of baby boomers are aging into Medicare, and this group is tech-savvy, careful with money and increasingly comfortable comparing options and enrolling online.

“The combination of more Medicare Advantage plans coming into the market and increased competition, increased transparency in cost and coverage, plus a more informed and tech-savvy buyer, there’s plenty of reason to think this is a trend that will continue,” he said.

Still, half of the respondents of this study had not previously been aware of the new open enrollment period before reviewing coverage options, and 38% learned about it only after contacting an agent or broker. In addition, 31% learned about it from a news source.

RELATED: Humana boosts MA enrollment projection for 2019

Hakim was surprised that half of the respondents who bought new coverage had visited first but didn’t enroll there, and those that bought from eHealth instead noted they wanted help from a licensed agent. So how did consumers react to this year’s open enrollment period?

Respondents changed plans due to dissatisfaction with old insurers (22%), dissatisfaction with copays (15%) or because a preferred doctor was no longer in-network (12%).

“I think our report, combined with regulatory changes and encouragement from the federal government, suggests we’ll continue to see an expansion of Medicare Advantage plans in the market and increased enrollment by Medicare beneficiaries,” Hakim added. “With increased competition, we may continue to see decreasing average premiums. A big factor in those decreasing premiums is the popularity of $0 premium Medicare Advantage plans.

"While Medicare Advantage plans may not be the best match for everyone in every situation (some people prefer original Medicare with a Medicare Supplement plan), they work for a lot of people, and it’s no mystery why they’re so attractive,” he said.