Average monthly premiums for prescription drug plans will drop by 2.3%—from $39.88 to $38.95—according to the analysis by Avalere, a Washington-based consulting firm.
There will also be a modest 3% dip in the number of Medicare Advantage plans offered for 2015, from 2,527 to 2,450. But reductions are disproportionately centered in urban areas in the Southern and mid-Atlantic states.
There continues to be a shift toward HMO plans in Medicare Advantage; those types of plans now make up roughly two-thirds of all products. By contrast, the number of PPO plans dropped from 593 to 541—an 8.8% reduction.
“The plans are trying to find ways to keep their costs down and HMOs are really the best way for them to control costs and really have a tighter grip on what kinds of services beneficiaries use,” Harhaj said.
A separate analysis of plan filings by HealthPocket, an online insurance-research tool, found a sharp reduction in the number of Advantage plans with no monthly premium paid by individuals (Medicare picks up the full tab for these). The prevalence of such plans dropped by 19%.
“If you're in one of those plans, which tend to be very popular, that would be a big cause for concern,” said Kev Coleman, HealthPocket's head of research and data, noting that many seniors are on fixed incomes. “The disappearance of those zero-premium plans has a lot of consequence.”
In addition, HealthPocket found that the average monthly premiums for 2015 Advantage plans is $62.69, an increase of 2% over this year. That monthly premium is nearly double what the CMS reported last week. The difference is that the federal agency weights its average to reflect actual enrollment. In other words, Medicare beneficiaries are more likely to enroll in the cheaper offerings on the market, bringing down the average cost.
The Patient Protection and Affordable Care Act included roughly $136 billion in rate reductions for the Advantage program, prompting widespread predictions that enrollment would drop. But since passage of the law, more than 5 million individuals have signed up for private plans, with roughly 30% of all Medicare beneficiaries now enrolled in Advantage plans.
The Medicare open-enrollment period runs from Oct. 15 to Dec. 7.
Follow Paul Demko on Twitter: @MHpdemko