- The average premium for Medicare Advantage plans is expected to increase slightly next year, but the large majority of beneficiaries will see no change, according to the Biden administration.
- The CMS on Tuesday announced that the average monthly plan premium will rise about 4%, from $17.86 this year to $18.50 in 2024. However, 73% of enrollees who remain on their current plan won’t see their premiums rise at all, regulators said.
- The number of MA plans and supplemental benefits being offered is also increasing in 2024, the CMS said. Medicare’s open enrollment period begins Oct. 15.
The MA program has increased in popularity among U.S. seniors, growing to cover more than half of all Medicare beneficiaries this year. Health insurers participating in MA have invested heavily in the program, which can be highly lucrative and is expected to continue expanding — the CMS projects a record 33.8 million people will enroll in MA in 2024.
“Today’s release shows that, as expected, people with Medicare will continue to have robust options and stable benefit offerings in the MA market,” said CMS Medicare head Meena Seshamani in a statement. “We encourage individuals eligible for Medicare to review these options as well as Traditional Medicare and enroll in the option that best meets their health needs.”
MA beneficiaries will on average see a slight premium increase for next year, but MA payers are looking to hold premiums down as they jockey for members, CMS data shows.
The release “reinforces the recurring annual conclusion that MA plans are reticent to raise premiums and continue to see tactical value in offering zero-premium plans to members,” TD Cowen analyst Gary Taylor wrote in a note Wednesday.
TD Cowen’s analysis of the agency’s release found sizable footprint expansions for insurers in 2024. CVS expanded the most in 2024, entering 248 new counties, representing 13% growth year over year.
UnitedHealth, the biggest MA payer in the U.S., expanded 4%, while Humana expanded 2% year over year, according to TD Cowen.
In the release, the CMS said supplemental benefit offerings will “increase slightly” next year. Though the file doesn’t include detailed information on the change in supplemental benefits like dental or vision, analysts said an increase in benefits raises questions about payer’s ability to preserve margins while chasing growth.
Regulators have increasingly tried to crack down on fraud, waste and abuse in the MA program, announcing plans earlier this year to claw back billions in overpayments and enact more oversight of MA advertising and coverage denials.
A top CMS official last week said the agency plans to “be a much tougher payer and much tougher regulator” in the future.