2022 Medicare Advantage Premiums Drop, Enrollment May Rise

Updated 9/30/21: This article has been updated to include a correction from Better Medicare Alliance. A previous version read "we urge lawmakers to project these gains," but this has been corrected to say "we urge lawmakers to protect project these gains."

The average Medicare Advantage premium will be lower in 2022 than in 2021 and Medicare Advantage enrollment is expected to increase, CMS announced.

In 2022, the average Medicare Advantage premium will cost $19 per month. The year prior, the average Medicare Advantage premium reached a monthly amount of $21.22.

As premiums fall, enrollment is projected to rise to 29.5 million beneficiaries, a 2.6 million person increase over Medicare Advantage enrollment in 2021.

The special supplemental benefit for the chronically ill is growing in its pervasiveness among health plans. A quarter of all Medicare Advantage plans will offer this benefit. In contrast, 19 percent of all Medicare Advantage plans offered this benefit in 2021. 

Additionally, to help address chronic diseases, members with diabetes may continue to have access to the Part D Senior Savings Model, which will be active in 2,100 plans.

The number of Medicare Advantage plans that are dual special needs plans will be higher in 2022 than it was the previous year. Almost 300 health plans will offer combined Medicare and Medicaid benefits in 2022, 39 more plans than in 2021.

Apart from these emerging trends, the more traditional Medicare Advantage supplemental benefits which constitute a key advantage of these plans—such as vision and hearing benefits—will continue to be a fixture of most Medicare Advantage plans, CMS shared.

The value-based insurance design model will have over 1,000 Medicare Advantage plan participants in 2022 and the hospice benefit component will be active in 22 states and territories.

The average premium for Medicare Part D in 2022 will be $33. This amount is higher than the average premium in 2021.

CMS noted that the Medicare Plan Finder will undergo an update on October 1, 2021 ahead of the open enrollment season. The agency reminded beneficiaries that they may have access to financial support for their healthcare coverage through the Medicare Savings Programs. 

Other sources for enrollment support that CMS will continue to provide include the on-demand call center and state health insurance programs.

"With the lowest average monthly premiums in 15 years, Medicare Advantage continues to deliver high-value care for beneficiaries going into 2022,” Mary Beth Donahue, president and chief executive officer of the Better Medicare Alliance, said in an emailed press release.

“We know these outcomes don’t happen on their own. As Congress continues its work on possible Medicare reforms, reports have already shown how certain changes to Medicare Advantage payment could impact seniors’ premiums and benefits. We urge lawmakers to protect these gains for beneficiaries and ensure Medicare Advantage remains equipped with the tools to provide low-cost, high-value care.”

The increased presence of special supplemental benefits for the chronically ill likely stems from Medicare Advantage plans’ propensity for attracting members with chronic illnesses. 

In 2021, 15 percent of non-employer Medicare Advantage plan members had access to special supplemental benefits for the chronically ill, an Avalere study revealed. In 2020, only six percent of Medicare Advantage members had access to these types of benefits through one of the 239 plans that offered them. 

However, the special supplemental benefits for the chronically ill program started in 2019, making its multiplying enrollment a strong indicator of Medicare Advantage beneficiaries’ priorities, the Avalere study noted at the time.

By increasing from 26.9 million to 29.5 million beneficiaries, the 2022 Medicare open enrollment season promises to continue a trend of high enrollment that Medicare Advantage plans have been experiencing for slightly less than a decade.

From 2013 to 2020, Medicare Advantage plans saw a 60 percent growth in enrollment. This trend occurred alongside a 49 percent rise in the number of Medicare Advantage plan options available to members from 2017 to 2020, Better Medicare Alliance shared. 

Early on in 2021, experts expected the Medicare Advantage program to cover 33 million lives by 2030, Better Medicare Alliance reported. The current projections for 2022 Medicare open enrollment demonstrate that the program may be well on its way to achieving that goal.