Medicare Advantage, Part D Premiums Increased Slightly in 2023

Average monthly premiums for Medicare Advantage and Part D plans have increased in 2023, and fewer beneficiaries selected zero-dollar premium plans, a report from eHealth, Inc. found.

eHealth’s sixth annual Medicare Index Report provides data on plans selected by eHealth consumers during Medicare’s 2023 Annual Enrollment Period, which ran from October 15 to December 7, 2022. More than 160,000 plan selections were included in the report.

As Medicare Advantage enrollment grows, policymakers and stakeholders have begun to scrutinize the private program more.

Medicare Advantage satisfaction remains high, and plans offer an affordable option for healthcare coverage, despite recent premium increases, according to eHealth researchers.

The average monthly Medicare Advantage premium grew by 50 percent from 2022 to 2023. The average premium in 2023 was $9 per month, compared to $6 in 2022, marking the second year in a row that premiums increased.

However, the average premium was still relatively low due to high enrollment in zero-dollar premium plans.

In 2023, 84 percent of Medicare Advantage plans selected by eHealth consumers had a zero-dollar monthly premium. This figure is down slightly from 87 percent in 2022 but is up significantly from 63 percent in 2018.

“The widespread availability of $0-premium Medicare Advantage plans was a major enrollment driver over the past decade. The avoidance of a monthly premium, coupled with the enriched benefits and value proposition relative to original Medicare has made these plans popular, particularly with seniors on a fixed budget,” Fran Soistman, chief executive officer of eHealth, said in the press release.

“Our findings suggest the market may be fully saturated with zero-dollar premium plans, with more beneficiaries selecting Medicare Advantage premium-bearing plans that provide lower out-of-pocket costs.”

The average monthly premium for Part D plans also rose by 45 percent, increasing from $22 in 2022 to $32 in 2023. Similar to the trend in Medicare Advantage premiums, this was the second consecutive year Part D premiums grew. What’s more, $32 per month is the highest Part D premium reported by eHealth in the last five years.

This growth may be influenced by several factors, including the coverage of new costly drugs, the report noted.

As Medicare Advantage and Part D premiums grew, Medicare Supplement premiums decreased for the first time since 2018. After reaching $178 per month in 2022, Medicare Supplement premiums fell to $173 per month in 2023.

Also known as Medigap, Medicare Supplement insurance provides additional coverage for Medicare beneficiaries and can protect them from out-of-pocket costs not covered by Medicare. A recent report from AHIP found that the share of beneficiaries with Medicare Supplement insurance grew from 38 percent to 41 percent in 2021.

Average deductible changes in 2023 were the opposite of premium changes for Medicare Advantage, Part D, and Medicare Supplement, the eHealth report revealed.

The average deductible for Medicare Advantage plans declined from $121 in 2022 to $103 in 2023, marking a 15 percent decrease. Similarly, the average deductible for Part D plans decreased from $427 to $289 from 2022 to 2023, or a 9 percent reduction.

Meanwhile, the average deductible for Medicare Supplement plans was $241 in 2023, up 33 percent from $181 in 2022.

A separate report from eHealth found that Medicare Advantage beneficiaries are highly satisfied with their plans, but financial barriers may create friction. For example, 89 percent of Medicare Advantage beneficiaries said they were satisfied with their coverage.

However, compared to Medicare Supplement beneficiaries, those with Medicare Advantage were more likely to have lower incomes and more limits to what they could afford in premiums and out-of-pocket expenses.