Report: Average Monthly Premiums for MA Plans Up First Time in 4 Years

The average monthly premium for Medicare Advantage plans increased to $7 in the first half of the Medicare Annual Open Enrollment period this year, representing the first increase in four years, a new report showed. Monthly premium averages were in the $4 to $5 range the last three years.

The eHealth report relies on data from plans selected by Medicare beneficiaries shopping at eHealth between October 15 and November 8. The Santa Clara, California-based company is a private online marketplace for health insurance.

This increase comes even as $0 premium plans have become more available. The Kaiser Family Foundation reported in November that 99% of Medicare beneficiaries have access to Medicare Advantage plans with prescription drug coverage (MA-PD) without monthly premiums. MA-PD plans with no monthly premium represent 66% of plans in 2023, up from 59% the year prior. 

Drug costs, weakening demand in $0 premium plans and inflation are all possible reasons for the increase in average premiums, said eHealth CEO Fran Soistman.

“This is the first increase in average premiums we’ve tracked in four years,” Soistman said in a news release. “It may be driven by a number of factors, including carrier premium increases related to drug costs, a leveling out of demand for $0 premium Medicare Advantage plans, or consumers opting for higher premium plans to hedge against out-of-pocket costs during a period of inflation. In our July survey, for example, 95% of Medicare respondents told us they worried about inflation’s impact on their health care costs.”

The company found that fewer people are selecting these $0 premium plans than they did the year before. In the first half of the 2023 annual open enrollment period, 84% of those choosing Medicare Advantage plans selected $0 premium plans, compared to 88% during the same period last year. 

“Medicare beneficiaries may intentionally select Medicare Advantage plans with higher monthly premiums based on several considerations, including out-of-pocket costs and provider networks,” eHealth stated in the report.

Average monthly premiums for stand-alone Medicare Part D Prescription Drug plans are also higher than last year, at $31 compared to $21.

A June eHealth survey of 2,800 Medicare Advantage enrollees found that satisfaction is high when it comes to their health plans. About nine in 10 enrollees said they are satisfied with their coverage, and another 86% said they would recommend Medicare Advantage plans to friends or family. When it comes to selecting Medicare Advantage plans over other alternatives, affordability seems to be a key reason, the same June survey found. 

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