Health, drug plan star ratings improve for 2018

CMS issued its star ratings for Medicare health and drug plans for 2018, which according to the agency will assist consumers with information on high-quality health choices for coverage. According to CMS, most areas across the country have Medicare Advantage and Part D plans with four or more stars. In 2018, approximately 73 percent of Medicare Advantage enrollees with prescription drug coverage will be in plans with four and five stars. This rose from the approximately 69 percent of enrollees in four and five star plans in 2017. Approximately 44 percent of Medicare Advantage plans that offer prescription drug coverage will have an overall rating of four stars or higher in 2018.

Medicare Part D prescription drug plan enrollees are also benefiting from improved access to high-quality plans. In 2018, approximately 47 percent of enrollees in stand-alone prescription drug plans will be in plans with four and five stars. This is an increase from the approximately 41 percent of enrollees in four or five star plans in 2017. Approximately 52 percent of stand-alone prescription drug plans will have a rating of four stars or higher in 2018.

The number of Medicare Advantage plans available to individuals to choose from is increasing from about 2,700 to more than 3,100 nationwide. More than 85 percent of people with Medicare will have access to 10 or more Medicare Advantage plans.

Premiums

CMS also estimated that the Medicare Advantage average monthly premium will decrease by 6 percent to $30 in 2018 from an average of $31.91 in 2017. About 77 percent of Medicare Advantage enrollees remaining in their current plan will have the same or lower premium for 2018. CMS noted that the average basic premium for a Medicare prescription drug plan in 2018 is projected to decline to an estimated $33.50 per month.

More choices and lower premiums available for MA and PDPs in CY 2018

As calendar year (CY) 2018 approaches, CMS reports that both the Medicare Advantage (MA) and the Part D prescription drug plan (PDP) programs continue to grow, currently providing care and services to more than one-third of Medicare beneficiaries. CMS also reports that the average monthly premium for an MA plan will decrease, enrollment in MA is projected to reach an all-time high, and premiums for a basic PDP will fall for the first time since 2012.

Earlier this year, CMS announced new policies in the 2018 Rate Announcement and Final Call Letter that support flexibility, efficiency, and innovative approaches that are designed to improve quality accessibility and affordability in MA and PDP programs.

MA program data

CMS data provides the following information regarding the MA program for CY 2018:

  • MA enrollment is projected to be an all-time high of 20.4 million beneficiaries, representing a 9-percent (1.7 million) increase from 18.7 million in CY 2017.
  • MA average monthly premiums will decrease by $1.91 to $30.
  • 99 percent of Medicare beneficiaries will have access to at least one MA health plan in their area.
  • More than 85 percent of Medicare beneficiaries will have access to 10 or more MA plans.
  • The average number of MA plan choices per county will increase by two plans—up to approximately 29 plan choices per county.
  • Access to popular supplemental benefits, such as dental, vision, and hearing, continues to grow in MA plans.
  • Approximately 77 percent of MA enrollees in 2017 will have the same or lower premium in 2018 if they continue in the same plan.

PDP program data

CMS projects that the average monthly premium for a basic Medicare PDP in CY 2018 will decrease by $1.20 to an estimated $33.50 per month. CMS also reports that all Medicare beneficiaries will have access to at least one stand-alone Medicare PDP.

Medicare Open Enrollment improvements

CMS is announcing several consumer-friendly improvements so that people with Medicare can make an informed choice between original fee-for-service Medicare and MA plans during open enrollment. These improvements include: (1) updating the “Medicare & You” handbook to better explain coverage options; (2) establishing a help wizard on Medicare.gov that will point to resources to help make informed health care decisions; and (3) establishing a new email communication opportunity to improve the customer service experience through important messages and reminders.

Report examines Medicare Part D trends since 2006

Seventy-one percent of Medicare beneficiaries are enrolled in Medicare Part D plans in 2016, in either stand-alone Part D plans (PDPs) (60 percent) or Medicare Advantage drug (MA-PD) plans (40 percent). A Kaiser Family Foundation (KFF) report examined trends among plans in 2016 and since 2006, analyzing areas including differences between PDP versus MA-PD plans, cost-sharing, and market share among insurers.

Enrollment and availability

In 2006, only 28 percent of beneficiaries were enrolled in MA-PD plans, increasing 12 percent by 2016. MA-PD plans sponsored by local firms play a larger role in that market segment than PDPs sponsored by local firms. At 886 in 2016, the number of available PDPs is lower than it has ever been. On average, 26 PDP plans are available to beneficiaries, compared to 55 in 2007. Sixteen MA-PD plans are available, on average.

Premiums, deductibles, and cost sharing

Premiums vary widely across plans, even among those offering an equivalent type of benefits. For example, basic benefit PDP premiums range from $11.40 to $139.70. They vary based on geography; the average basic benefit PDP monthly premium in New Mexico is $ 17.05, for example, compared to $37.13 in New Jersey. Average national monthly PDP premiums have increased by 6 percent since 2015 to $39.21, while MA-PD plan premiums have risen only modestly to $16.99.

While most PDP and MA-PD plans have five-tier formularies, tiered pharmacy networks, enhanced benefits, no additional gap coverage, and deductibles less than the standard $360 amount, more PDP enrollees are enrolled in plans with tiered pharmacy networks and more MA-PD plan enrollees are enrolled in plans with deductibles less than $360. In 2006, most enrollees were enrolled in plans with only three or four tiers, whereas in 2016, 98 percent of PDP enrollees and 96 percent of MA-PD plan enrollees participate in multi-tiered plans.

Coinsurance is becoming more common in PDPs, as 31 percent of enrollees pay coinsurance for preferred brand drugs and 96 percent pay coinsurance for non-preferred brand drugs. Still, almost all PDPs and MA-PD plans charge copayments for generic tiers. Most MA-PD plans use copayments for all tiers other than the specialty tier.

Market concentration

Market concentration has increased modestly since 2006, particularly among PDPs. UnitedHealth, Humana, and CVS Health enrolled 52 percent of all Part D participants in 2016. Should Aetna acquire Humana, the resulting company would account for 26 percent of all Part D enrollment in 2016, although it would account for 40 to 50 percent of enrollment in seven specific regions. If the both the Aetna-Humana and Anthem-Cigna mergers go through, 23 of 34 regions would be considered highly concentrated.

Legislation

Some senators would like to take action to stabilize the amount of money that rural pharmacies pay for Part D prescriptions. Senators Shelley Moore Capito (R-WVa) and Jon Tester (D-Mont) noted that some Medicare Part D sponsors and pharmacy benefit managers have begun retroactively imposing fees on pharmacists weeks and months after prescriptions were filled. The Improving Transparency and Accuracy in Medicare Part D Drug Spending Act (H.R. 5951) would prohibit such retroactive fees with respect to accurate claims.