With the release of the 2019 landscape files, benefit information and Star Ratings data, now is the time to update your market analyses to understand trends in your current and potential markets. Nationwide, 2019 monthly premiums for Medicare Advantage Prescription Drug Plans (MA-PDs), excluding Special Needs Plans (SNPs) and Medicare-Medicaid Plans (MMPs), range from $0 per month to $388 per month, with the average monthly premium being $51.21. The average monthly premium of MA-PDs decreased from 2018 by 23%. While a decrease aligns with the overall premium trends since 2016, this level of decrease is unprecedented. The overall decrease in the 2019 average monthly premium is nearly four times the average premium decrease seen in 2018 (8% decrease) and seven times the average premium decrease seen in 2017 (3% decrease). Since 2016, MA-PDs have seen an overall decrease in monthly premium amounts by 31%, from $74.25 to $51.21 – a $23 decrease. How have premiums changed in your market(s)?
As discussed often in recent years, $0 monthly premium plans are on the rise. Notably, nearly half (44%) of MA-PDs have a $0 monthly premium. This segment saw the most growth in the distinct number of plan benefit packages (PBPs) offered with an increase in nearly 300 new $0 MA-PDs. The premium segment that saw the second most growth in the distinct count of PBPs from 2018 to 2019 is MA-PDs, with a monthly premium between $1 and $50; 28% of MA-PDs fall in this premium range, with an increase of nearly 121 PBPs. Additionally, the number of PBPs available with a monthly premium over $150 has decreased since 2016. Gorman Health Group (GHG) expects to see these trends continue.
While 44% of all PBPs are $0 monthly premium plans, over half (56%) of all Health Maintenance Organizations (HMOs) are $0 premium plans, and 75% of $0 premium plans are HMOs. We expect to see the number of $0 PBPs to continue to increase, especially in the HMO product. Remarkably, nearly 30% of Preferred Provider Organization (PPO) products are $0 premium plans. For 2019, there are an additional 124 $0 premium plan PPOs available. This is nearly three times the overall $0 PPO growth in 2018. With the growth in availability of $0 PBPs, Medicare Advantage Organizations (MAOs) will need to continue to push for innovative product design benefits to remain competitive. Even $0 premium plans need to explore creative ways to make their plans stand out in the $0 crowd.
The average monthly premium by state (excluding Puerto Rico and territories) ranges from $129 in North Dakota ($129.13) to $17 in Florida ($17.01). As in years prior, the states with the highest average premium are found in the plains states region – North Dakota ($129.13), South Dakota ($104.40), and Minnesota ($104.36). This is not surprising as these states continue to have large enrollment in Cost plans, which are traditionally structured to have high premiums. For example, in 2019, the average monthly premium of Cost plans is $130.43.
So what does this all mean for you? Now is the time to replicate a similar analysis to understand your current and/or potential markets. Additionally, assess the key benefits offered, including ALL supplemental benefits. Some of these benefits include the maximum out-of-pocket, inpatient hospital cost sharing, primary care physician and specialist cost sharing, and supplemental benefits like routine dental, vision, and hearing – and don’t forget to assess plans offering targeted supplemental benefits. How do your plans stack up to the competition? Are you growth goals for this coming Annual Election Period (AEP) realistic? Are your AEP marketing and sales strategies ready to face the competition and meet growth goals – what can you adjust? What must you consider for 2020? No, it’s not too early to start planning – product and benefit development is a year-long process.
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