Medicare Advantage in 2022: Premiums, Out-of-Pocket Limits, Cost Sharing, Supplemental Benefits, Prior Authorization, and Star Ratings


Medicare beneficiaries have the choice of receiving their Half A and Half B Medicare advantages by means of a personal Medicare Advantage plan. The federal authorities contracts with non-public insurers to offer Medicare advantages to enrollees, and plans are required to fulfill federal requirements. For instance, Medicare Advantage plans are required to offer an out-of-pocket restrict, and will present further advantages or decreased value sharing in comparison with conventional Medicare. They’re additionally permitted to restrict supplier networks, and will require prior authorization for sure providers, topic to federal requirements. This transient offers details about Medicare Advantage plans in 2022, together with premiums, value sharing, out-of-pocket limits, supplemental advantages, prior authorization, and star scores, in addition to tendencies over time. A companion evaluation study tendencies in Medicare Advantage enrollment.

Almost 7 in 10 Medicare Advantage enrollees (69%) are in plans with no supplemental premium (apart from the Half B premium) in 2022

In 2022, almost 7 in 10 beneficiaries (69%) are in zero-premium particular person Medicare Advantage plans with prescription drug protection (MA-PDs), and pay no premium apart from the Medicare Half B premium ($170.10 in 2022). The MA-PD premium contains each the price of Medicare-covered Half A and Half B advantages and Half D prescription drug protection. In 2022, 87% of Medicare Advantage enrollees in plans open for basic enrollment are in plans that supply prescription drug protection.

Altogether, together with those that don’t pay a premium, the typical enrollment-weighted premium in 2022 is $18 per thirty days, and averages $11 per thirty days for simply the Half D portion of lined advantages, considerably decrease than the typical premium of $40 for stand-alone prescription drug plan (PDP) premiums in 2022. Greater common PDP premiums in comparison with the MA-PD drug portion of premiums is due partly to the flexibility of MA-PD sponsors to make use of rebate {dollars} from Medicare funds for advantages lined beneath Components A and B to decrease their Half D premiums, which in accordance with the Medicare Fee Advisory Fee (MedPAC), are $300 per enrollee yearly in 2022.

For the remaining 31% of beneficiaries who’re in plans with a MA-PD premium (5.7 million), the typical premium is $58 per thirty days, and averages $35 for the Half D portion of lined advantages – barely decrease than the $40 month-to-month PDP premium.

Premiums paid by Medicare Advantage enrollees have declined since 2015

In 2022, the typical enrollment weighted MA-PD premium, together with amongst those that don’t pay a premium, is $18 per thirty days. Nonetheless, common MA-PD premiums range by plan kind, starting from $16 per thirty days for HMOs to $20 per thirty days for native PPOs and $49 per thirty days for regional PPOs. Almost 6 in 10 Medicare Advantage enrollees are in HMOs (59%), 38% are in native PPOs, and three% are in regional PPOs in 2022. Regional PPOs have been established to offer rural beneficiaries with larger entry to Medicare Advantage plans.

Common MA-PD premiums have declined from $36 per thirty days in 2015 to $18 per thirty days in 2022. The discount is pushed partly by the decline in premiums for native PPOs and HMOs, that account for a rising share of enrollment over this time interval. Since 2015, a rising share of plans are bidding under the benchmark, which permits them to supply protection with out charging an extra premium. Extra plans are bidding under the benchmark partly as a result of Medicare Advantage benchmarks relative to conventional Medicare have elevated over time, and when benchmarks enhance, plans are capable of maintain extra for Half A and B providers in addition to for additional advantages. Additional, rebates paid to plans have elevated over time, and plans are allocating a few of these rebate {dollars} to decrease the half D portion of the MA-PD premium. Collectively, these tendencies contribute to larger availability of zero-premium plans, which brings down common premiums.

The common out-of-pocket restrict for Medicare Advantage enrollees is $4,972 for in-network providers and $9,245 for each in-network and out-of-network providers (PPOs)

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Determine 3: Common Medicare Advantage Plan Out-of-Pocket Limits, Weighted by Plan Enrollment, 2022

Since 2011, federal regulation has required Medicare Advantage plans to offer an out-of-pocket restrict for providers lined beneath Components A and B. In 2022, the out-of-pocket restrict might not exceed $7,550 for in-network providers and $11,300 for in-network and out-of-network providers mixed. These limits will enhance to $8,300 for in-network providers and $12,450 for in-network and out-of-network providers mixed in 2023. These out-of-pocket limits apply to Half A and B providers solely, and don’t apply to Half D spending, for which there’s a separate out-of-pocket threshold of $7,050 in 2022, above which enrollees pay 5% of prices. Whether or not a plan has solely an in-network cap or a cap for in- and out-of-network providers relies on the kind of plan. HMOs typically solely cowl providers supplied by in-network suppliers, whereas PPOs additionally cowl providers delivered by out-of-network suppliers however cost enrollees increased value sharing for this care. The dimensions of Medicare Advantage supplier networks for physicians and hospitals range vastly each throughout counties and throughout plans in the identical county.

In 2022, the weighted common out-of-pocket restrict for Medicare Advantage enrollees is $4,972 for in-network providers and $9,245 for in-network and out-of-network providers mixed. For enrollees in HMOs, the typical out-of-pocket (in-network) restrict is $4,365. Enrollees in HMOs are typically answerable for 100% of prices incurred for out-of-network care. Nonetheless, HMO level of sale (POS) plans permit out-of-network look after sure providers, although it usually prices greater than in-network protection. For native and regional PPO enrollees, the typical out-of-pocket restrict for each in-network and out-of-network providers is $9,228, and $9,452, respectively.

The common out-of-pocket restrict for in-network providers has typically trended down from 2017, and the typical in-network restrict decreased from $5,091 in 2021 to $4,972 in 2022. The common mixed in- and out-of-network restrict for PPOs barely elevated from $9,208 in 2021 to $9,245 in 2022.

About half of all Medicare Advantage enrollees would incur increased prices than beneficiaries in conventional Medicare for a 7-day hospital keep

Medicare Advantage plans have the pliability to change value sharing for many providers, topic to limitations. Whole Medicare Advantage value sharing for Half A and B providers can not exceed value sharing for these providers in conventional Medicare on an actuarially equal foundation. Additional, Medicare Advantage plans might not cost enrollees increased value sharing than beneath conventional Medicare for sure particular providers, together with chemotherapy, expert nursing facility (SNF) care, and renal dialysis providers.

Medicare Advantage plans even have the pliability to cut back value sharing for Half A and B advantages, and will use rebate {dollars} to take action. Based on MedPAC, in 2022, about 43 % of rebate {dollars} (or $840 per enrollee anually) have been used to decrease value sharing for Medicare providers.

Within the case of inpatient hospital stays, Medicare Advantage plans typically don’t impose the Half A deductible, however usually cost a each day copayment, starting on day 1. Plans range within the variety of days they impose a each day copayment for inpatient hospital care, and the quantity they cost per day. In distinction, beneath conventional Medicare, when beneficiaries require an inpatient hospital keep, there’s a deductible of $1,556 in 2022 (for one spell of sickness) with no copayments till day 60 of an inpatient keep (assuming no supplemental protection that covers some or all the deductible).

In 2022, just about all Medicare Advantage enrollees (99%) would pay lower than the standard Medicare Half A hospital deductible for an inpatient keep of three days, and these enrollees would pay $749 on common (Determine 3). However about half of all Medicare Advantage enrollees (51%) would pay greater than they might beneath conventional Medicare (with its $1,556 deductible) for stays of seven or extra days, with common value sharing of $1,828, amongst these enrollees with prices above conventional Medicare.

For a keep of 14 days, greater than three-quarters (77%) of Medicare Advantage enrollees would pay greater than beneficiaries in conventional Medicare, and amongst these enrollees in plans with cost-sharing necessities that may exceed the Half A deductible, common value sharing could be $3,180. Whole prices in Medicare Advantage could be increased than they might be in conventional Medicare (with out supplemental protection) however not excessive sufficient to achieve the typical Medicare Advantage out-of-pocket restrict. Nonetheless, this evaluation doesn’t take into consideration different spending by Medicare Advantage beneficiaries in the course of the yr that will trigger them to achieve their most out-of-pocket limits.

This evaluation additionally doesn’t take into consideration the truth that a majority of individuals in conventional Medicare wouldn’t pay the deductible if hospitalized as a result of they’ve supplemental protection, though these with Medigap or retiree well being would have the extra value of a month-to-month premium. Nonetheless, 5.6 million beneficiaries in conventional Medicare haven’t any supplemental protection and could be accountable for the complete Half A deductible if admitted to the hospital.

Most Medicare Advantage enrollees have entry to some advantages not lined by conventional Medicare in 2022 and Particular Wants Plan (SNP) enrollees have larger entry to sure advantages

Medicare Advantage plans might present additional (“supplemental”) advantages that aren’t out there in conventional Medicare. The price of these advantages could also be lined utilizing rebate {dollars} (which can embrace bonus funds) paid by CMS to personal plans. Lately, the rebate portion of federal funds to Medicare Advantage plans has risen quickly, totaling $432 per enrollee yearly for non-Medicare supplemental advantages, a 24% enhance over 2021. The rise in rebate funds to plans is due partly to incentives for plans to doc further diagnoses that increase danger scores, which in flip, generate increased rebate quantities that make it attainable for plans to offer additional advantages. Plans may cost further premiums for such advantages, however most don’t do that. Starting in 2019, Medicare Advantage plans have been capable of provide further supplemental advantages that weren’t supplied in earlier years. These supplemental advantages should nonetheless be thought-about “primarily health related” however CMS expanded this definition, so extra gadgets and providers can be found as supplemental advantages.

Most enrollees in particular person Medicare Advantage plans (these typically out there to Medicare beneficiaries) are in plans that present entry to eye exams and/or glasses (greater than 99%), listening to exams and/or aids (98%), a health profit (98%), telehealth providers (98%), and dental care (96%). Equally, most enrollees in SNPs are in plans that present entry to those advantages. This evaluation excludes employer-group well being plans as a result of employer plans don’t submit bids, and knowledge on supplemental advantages is probably not reflective of what employer plans really provide.

Although these advantages are extensively out there, the scope of particular providers varies. For instance, a dental profit might embrace preventive providers solely, equivalent to cleanings or x-rays, or extra complete protection, equivalent to crowns or dentures. Plans additionally range by way of value sharing for numerous providers and limits on the variety of providers lined per yr, many impose an annual greenback cap on the quantity the plan can pay towards lined service, and a few have networks of dental suppliers beneficiaries should select from. Enrollees in SNPs have extra entry to sure advantages in comparison with enrollees in particular person plans, equivalent to over-the-counter drug advantages (96% vs 84%); transportation (90% vs 39%); a meal profit (79% vs 71%) and in-home assist providers (20% vs 12%). Nonetheless, there isn’t a publicly out there knowledge on how ceaselessly supplemental advantages are utilized by enrollees or the quantities they pay out-of-pocket for these providers.

As of 2020, Medicare Advantage plans have been allowed to incorporate telehealth advantages as a part of the essential Medicare Half A and B profit bundle – past what was allowed beneath conventional Medicare previous to the general public well being emergency. These advantages are thought-about “telehealth” within the determine above, although their value is probably not lined by both rebates or supplemental premiums. Medicare Advantage plans can also provide supplemental telehealth advantages through distant entry applied sciences and/or telemonitoring providers, which can be utilized for these providers that don’t meet the necessities for protection beneath conventional Medicare or the necessities for extra telehealth advantages (such because the requirement of being lined by Medicare Half B when supplied in-person). Nearly all of enrollees in each particular person plans and SNPs have entry to distant entry applied sciences (72% and 80%, respectively), however simply 4% of enrollees in particular person plans and in SNPs have entry to telemonitoring providers.

A small share of Medicare Advantage enrollees in particular person plans (lower than 10%) have entry to Particular Supplemental Benefits for the Chronically In poor health (SSBCI), however a bigger share of enrollees in SNPs have entry to those advantages

Starting in 2020, Medicare Advantage plans have additionally been capable of provide additional advantages that aren’t primarily well being associated for chronically in poor health beneficiaries, often called Particular Supplemental Benefits for the Chronically In poor health (SSBCI). Nearly all of plans don’t but provide these advantages. Fewer than half of all SNP enrollees are in plans that supply some SSBCI. The share of Medicare Advantage enrollees who’ve entry to SSBCI advantages is highest for meals and produce (9.6% for particular person plans and 35.1% for SNPs), meals (past a restricted foundation) (7.8% in particular person plans and 17.3% for SNPs), transportation for non-medical wants (6.5% for particular person plans and 20.5% for SNPs), and pest management (6.4% for particular person plans and 18.9% for SNPs).

Almost all Medicare Advantage enrollees are in plans that require prior authorization for some providers

Medicare Advantage plans can require enrollees to obtain prior authorization earlier than a service might be lined, and almost all Medicare Advantage enrollees (99%) are in plans that require prior authorization for some providers in 2022. Prior authorization is most frequently required for comparatively costly providers, equivalent to Half B medicine (99%), expert nursing facility stays (98%), and inpatient hospital stays (acute: 98%; psychiatric: 94%), and is never required for preventive providers (6%). Prior authorization can also be required for almost all of enrollees for some additional advantages (in plans that supply these advantages), together with complete dental providers, listening to and eye exams, and transportation. The variety of enrollees in plans that require prior authorization for a number of providers stayed the identical from 2021 to 2022. In distinction to Medicare Advantage plans, conventional Medicare doesn’t typically require prior authorization for providers and doesn’t require step remedy for Half B medicine.

Since 2015, the best share of Medicare Advantage enrollees are in plans that obtain top quality scores (4 or extra stars)

For a few years, CMS has posted high quality scores of Medicare Advantage plans to offer beneficiaries with further details about plans supplied of their space. All plans are rated on a 1 to 5-star scale, with 1 star representing poor efficiency, 3 stars representing common efficiency, and 5 stars representing glorious efficiency. CMS assigns high quality scores on the contract degree, quite than for every particular person plan, that means that every plan lined beneath the identical contract receives the identical high quality score; most contracts cowl a number of plans.

In 2022, almost 9 in 10 (86%) Medicare Advantage enrollees are in plans with a score of 4 or extra stars, a rise from 2021 (73%) and the best share enrolled since 2015. An extra 3 % of enrollees are in plans that weren’t rated as a result of they’re in a plan that’s too new or has too low enrollment to obtain a score. Plans with 4 or extra stars and plans with out scores are eligible to obtain bonus funds for every enrollee the next plan yr. The star scores displayed within the determine above are what beneficiaries noticed after they selected a Medicare plan for 2022 and are totally different than what’s used to find out bonus funds.

Usually, star scores are calculated yearly based mostly on knowledge from the earlier yr. Nonetheless, as a result of COVID-19 pandemic and disruptions to knowledge assortment, in addition to “to avoid inadvertently creating incentives to place cost considerations above patient safety”, CMS modified the calculation of star scores. For some measures, if the score on that measure was decrease than the prior yr, the scores reverted again to the 2021 worth to carry plans innocent. The substantial enhance within the variety of MA-PD enrollees in plans with 4 or extra stars from 2021 could also be as a consequence of these and different methodological adjustments, and has value implications for the Medicare program as bonus funds reached $10 billion in 2022. Lately, MedPAC has raised issues in regards to the star score system and the bonus cost system, together with that star scores are reported on the contract quite than the plan degree, and is probably not a helpful indicator of high quality for beneficiaries.

Dialogue

In 2022, almost 7 in 10  Medicare Advantage enrollees (69%) are in plans that don’t cost a premium (apart from the Half B premium) with the remaining third paying a premium, averaging about $58 per thirty days. Most enrollees are in plans that present entry to quite a lot of supplemental advantages, equivalent to eye exams, dental and health advantages. Almost all enrollees are in plans that require prior authorization for some providers. Medicare Advantage value sharing for Medicare-covered and different advantages varies throughout plans and will be decrease than conventional Medicare, however that’s not all the time the case. Plans additionally range in by way of supplier networks and prescription drug advantages, that are past the scope of this evaluation, however are essential concerns for customers.

Whereas knowledge on Medicare Advantage plan availability and enrollment and plan choices is strong, the identical can’t be stated about service utilization and out-of-pocket spending patterns, which is important for assessing how nicely this system is assembly its objectives by way of worth and high quality and to Help Medicare beneficiaries examine protection choices. As enrollment in Medicare Advantage and federal funds to personal plans continues to Grow, this data will develop into more and more essential.

Meredith Freed, Jeannie Fuglesten Biniek, Tricia Neuman are with KFF.

Anthony Damico is an unbiased advisor.

This evaluation makes use of knowledge from the Facilities for Medicare & Medicaid Companies (CMS) Medicare Advantage Enrollment, Profit and Panorama recordsdata for the respective yr. KFF is now utilizing the Medicare Enrollment Dashboard for enrollment knowledge, from March of every yr.

In earlier years, KFF had used the time period Medicare Advantage to check with Medicare Advantage plans in addition to different kinds of non-public plans, together with value plans, PACE plans, and HCPPs. Nonetheless, value plans, PACE plans, HCPPs at the moment are excluded from this evaluation along with MMPs. On this evaluation, KFF excludes these different plans as some might have totally different enrollment necessities than Medicare Advantage plans (e.g., could also be out there to beneficiaries with solely Half B protection) and in some instances, could also be paid otherwise than Medicare Advantage plans. These exclusions are mirrored in each the 2022 knowledge and in knowledge displayed trending again to 2010.

For calculating how a lot Medicare beneficiaries might pay out-of-pocket for an inpatient hospital admission, we used the 2022 Medicare Plan Finder Profit Abstract knowledge. For conventional Medicare, beneficiaries with out supplemental protection would incur the Half A hospital deductible of $1,556 in 2022 (for one spell of sickness). For Medicare Advantage, we use 2022 Medicare Plan Finder knowledge to calculate out-of-pocket prices for inpatient stays for Medicare Advantage enrollees, weighted by 2022 plan enrollment.

The evaluation doesn’t take into consideration deductibles that some Medicare Advantage enrollees face, and if taken into consideration, would enhance prices for some enrollees. The evaluation additionally doesn’t take into consideration most out-of-pocket limits beneath Medicare Advantage, which might cap the quantity enrollees pay for his or her care, together with hospitalizations. It’s attainable that some Medicare Advantage enrollees would attain their out-of-pocket restrict throughout their inpatient keep, notably if they’d incurred excessive bills previous to an inpatient admission. Nonetheless, in 2022 the typical out-of-pocket most is $4,972, which is above the cost-sharing quantity that every one Medicare Advantage enrollees would pay for a 7-day hospital keep, assuming no different medical bills in the course of the protection yr.

 

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