Last week, the Centers for Medicare & Medicaid Services (CMS) announced their expectation that premiums will drop for Medicare Advantage in 2020. These lowered premiums are anticipated despite growing options and benefits. This news follows on the heels of CMS’ announcement of anticipated average Medicare Part D premiums, which are also likely to be lower, yet again.
Ahead of Medicare’s Annual Enrollment Period (AEP) — and prior to the official announcement of Original Medicare’s 2020 costs — it’s important to know these expected averages, so you can be better prepared for AEP this year!
All statistics and figures are from CMS’ September 24, 2019, press release and the July 30, 2019, press release on the subjects, unless there is a specific link elsewhere.
Medicare Advantage
According to the figures shared in the recent press release, 2020 could be a big year for Medicare Advantage beneficiaries. Yet again, the average Medicare Advantage premium is expected to drop, from $26.87 in 2019 to $23 in 2020. Keep in mind that this is an expected estimation of the average, so the final numbers may be larger or smaller. With that said, if these figures end up being accurate, they will be the lowest premiums offered in the last thirteen years, since 2006.
That is what CMS has been delivering with its improvements to Medicare Advantage: lower costs, more options, and benefits tailored to patients’ needs. — HHS Secretary Alex Azar
Beyond the price, Medicare Part C is anticipated to see growth in a few other key areas. For one, the number of people enrolled in Medicare Advantage is predicted to grow from 22.2 million in 2019 to over 24.4 million in 2020, a nine-percent growth in enrollment and an all-time high.
These dramatically lower costs in Medicare Advantage and Part D means that we are putting dollars back into the pockets of our seniors. — CMS Administrator Seema Verma
The number of plans available to beneficiaries are also on the rise. According to CMS, there is an expected 600 more plans available nationwide in 2020, compared to 2019. This also sees a growth in the average number of plans available by county, from 33 in 2019 to 39 in 2020. So, wherever you are, CMS anticipates more Medicare Advantage options.
Medicare Part D
Medicare Advantage isn’t the only part of the Medicare program that’s expecting a drop in costs. For the third year in a row, Part D beneficiaries should see lowered premiums. In 2020, the projected average premium for a Part D plan is $30, which would be the lowest average premium since 2013. Again, these are anticipated averages, so specific Medicare Part D plans may not match this premium exactly.
Medicare Part D plans continue to be extremely popular … [by] offering plans more ways to provide low-cost options and delivering patients more transparency on drug prices. — HHS Secretary Alex Azar
These savings are predicted to save beneficiaries $1.9 billion in premiums. At the same time, Medicare Part D bid amounts have been estimated to save taxpayers roughly $6 billion from lower Medicare insurance premium subsidies in the last three years.
CMS has been taking action to lower the cost of prescription drugs, and we are seeing the results of our actions. — CMS Administrator Seema Verma
Between the coverage and savings that Medicare Part D offers, the program has seen a rise in popularity in the last three years. In that time, Part D has seen a 12.2 growth in enrollment, marking it as one of the more popular Medicare insurance options available.
Looking Forward
As we’ve noted a few times, it’s important to remember that both programs are federally approved health coverage options that are offered by private companies. This means that individual plans may have different premiums, which is why we look at the expected average of these plans. So, while the average Medicare Advantage plan premium is predicted to be $23, a specific plan may have $24 or even $22 options, for example.
For those interested in Original Medicare prices, those numbers have not been announced yet. As soon as they’re announced, we’ll update this article to include a link to our report on 2020’s Original Medicare costs.
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Knowing what you can expect with premiums is an excellent way to prepare for Medicare’s AEP. Armed with this knowledge and preparation, you’ll be more likely to make a well-informed decision that suits your health care and financial needs. To see Medicare Advantage and Part D plans near you, check out the Shop & Enroll Plan Finder, which can provide local plans and connect you with a licensed sales agent to help you explore your options.
