October 2020
During Medicare Open Enrollment, it’s important for seniors to take the time to review their coverage for 2021. Most people don’t shop during Open Enrollment — and that’s a potentially costly mistake.
In case you need a refresher, Medicare Advantage is the private portion of Medicare. Sold by individual companies, it covers all of the same benefits as Original Medicare (that’s by law), plus extras that vary by plan.
And those “extras” are important: prescription drugs, dental and vision coverage, hearing aids and exams, gym memberships, 24/7 nurse phone lines, post-hospital meal delivery and more.
Over a third of Medicare members now choose these private plans over Original Medicare.
But if you like Original Medicare and want to keep it, know that you also have options for filling in some of the gaps in coverage and cost. Medicare Part D, a private prescription drug plan, can help you pay for prescriptions. And Medigap, a Medicare supplement plan, can help take care of some of your out-of-pocket costs under Original Medicare.
Point being, there are several ways to supplement or replace your Original Medicare coverage with a private plan. You may save money and gain access to benefits you wouldn’t otherwise get.
Here are some important updates and information for Medicare in 2021.
Enrollment in Medicare Advantage continues to climb, with a new incentive for people with ESRD.
Medicare Advantage continues to attract new members. The Centers for Medicare and Medicaid Services (CMS) expects enrollment in MA plans to hit nearly 27 million people in 2021 — an estimated 42% of the total Medicare population. And at least some of that historically high enrollment will be from people with end-stage renal disease (ESRD).
For the first time in 2021, people with ESRD can now enroll in a private Medicare Advantage plan without any of the restrictions they faced before.
Before 2021, people with end-stage renal disease could only have Advantage if they had it before they were diagnosed with the disease or were otherwise grandfathered in. That restriction has been lifted. And newly diagnosed ESRD patients can now buy Medicare Advantage.
So if you or a loved one has ESRD and wants to check out the benefits of a private health plan, now’s the time.
The estimated enrollment bump for 2021 represents a 44% increase in the number of MA members since 2017. On the whole, enrollment in private Medicare plans has increased steadily over the last decade, primarily thanks to lower costs and broader benefits.
Costs are going down for Medicare Advantage and Part D plans (again).
The CMS reports that costs will, once again, decrease for private Medicare plans and standalone prescription drug plans. Official estimates put the average monthly premium for Medicare Advantage at $21 a month nationwide.
Our estimates differ slightly. Based on our analysis of CMS state data, the average premium for Medicare Advantage is a little over $26 a month in 2021.
These are preliminary estimates, though, and there could be some variation in costs. Suffice it to say, Advantage premiums are at their lowest since 2007.
The CMS reports an overall decrease in MA monthly premiums of about 34% since 2017. And in some states — like Alabama, Kentucky, Michigan and Nevada — MA premiums have been cut in half over the last four years.
Per the Trump administration, Medicare Advantage members have saved nearly $1.5 billion in premium costs since 2017 thanks to decreasing monthly premiums.
In 2021, nearly everyone with Medicare (99.3%) will have access to at least one Medicare Advantage plan with a $0 monthly premium.
The Part D basic premium is estimated to be about $30.50 for 2021, but overall costs under Part D are skewing down. Nearly all Medicare enrollees (99.9%) will have access to a Part D drug plan that costs less than what they paid in 2020.
On average, the lowest Part D plan available costs a little over $7 a month in 2021.
People who need insulin could pay less for their meds in 2021.
Starting in January, seniors who need insulin could pay less for it at the pharmacy counter. Medicare Advantage plans with prescription drug coverage and standalone Part D drug plans will offer select plans that cover insulin for no more than $35 a month.
The Trump administration estimates that people with these plans could save around $466 (or 66%) on their out-of-pocket insulin costs for the year.
According to the CMS, there will be over 1,600 plans capping insulin costs under the newly introduced Part D Senior Savings Model. Our analysis of CMS state data puts that number to slightly over 1,900 plans.
In any case, if you need insulin, this year will be a good year to review your drug coverage under Part D or a Medicare Advantage plan with drug coverage. You may save money on your medication.
More people will have access to more plans next year.
Finally, in other positive news for Medicare Advantage this year, there will be more plans available to more people nationwide. Except in Alaska, where no new MA plans are currently being offered, most people across the U.S. will have access to more plan options than they did last year.
According to our CMS state data analysis, there are about 600 more Medicare Advantage plans available in 2021 (total) than there were in 2020. The CMS reports an overall increase of 2,100 plans since 2017.
State availability varies, of course, with some states boasting hundreds of plans and others a couple dozen or fewer.
Over 450 Medicare Advantage plans will cover what the CMS is calling “innovative benefits.” These benefits vary by plan, but they could include access to things like wellness and healthcare planning, rewards and incentives programs, and reduced cost sharing, per the CMS.
Plan choice per county has also increased. In 2020, there were about 39 Medicare Advantage plans per county. That’s increased to about 47 plans per county in 2021. Again, averages don’t always represent the larger picture. Rural access is improving, though, with rural county access to MA plans seeing an 18% bump since last year (2,450 plans in 2020 to 2,900 in 2021).
All in all, it’s good news for Medicare members this year.
With more plans, lower costs and added benefits for private health plans under Medicare next year, this year’s signup season offers even greater incentives than usual to take another look at your options.