Medicare Advantage premiums, benefits look stable for 2025
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The average monthly premium for privately-run Medicare plans will fall slightly to $17.00 next year, down from the current average of $18.23, federal officials said Friday.
Why it matters: Despite insurers' warnings of benefit cuts, the Centers for Medicare and Medicaid Services expects Medicare Advantage enrollees' benefits and access to coverage to remain stable in 2025, based on plan bids submitted to the federal agency.
- About 51% of all Medicare beneficiaries will enroll in Medicare Advantage plans next year, CMS estimated.
State of play: More than 80% of MA enrollees will have the same or lower monthly premium next year if they remain in the same plan, CMS said.
- Medicare Advantage plans on average will get $210 per member a month in rebates from the federal government, which they have to use to offer supplemental benefits, lower premiums or reduce cost-sharing. That's a $1 increase from 2024's average.
- Nearly all MA plans will offer dental, vision and hearing coverage.
Zoom out: Medicare insurers have been sounding the alarm that they'll have to scale back benefits or pull out of some markets in 2025, after the Biden administration announced a slight decrease in plans' baseline payments for next year.
- Health experts have long maintained that the plans are overpaid and cost taxpayers tens of billions of dollars more than they should.
- But insurers cite rising costs due to higher demand for medical services as patients catch up on care they deferred during the pandemic.
Humana announced earlier this month that it would scale back its Medicare Advantage offerings, affecting about 560,000 beneficiaries. Centene's WellCare subsidy will exit the MA market in six states next year.
- CVS Health's Aetna, the third-largest Medicare Advantage insurer, said earlier this year that it may cut back its MA membership by up to 10%.
- The average county will still have 34 Medicare Advantage plans for seniors to choose from next year. Counties have an average of 65 plans when including special offerings available to beneficiaries meeting certain qualifications, per CMS.
Standalone Medicare prescription drug plans will have average monthly premiums of $40 in 2025, a decrease of $1.63 compared from current levels, CMS said.
- After applying rebates, enrollees in a combined Medicare Advantage and prescription drug plan will have $13.50 average monthly premiums, about $2 less than this year.
- Most standalone prescription drug plans are participating in a controversial CMS program that reduces plan premiums by $15, CMS said.
- All Medicare beneficiaries will have their out-of-pocket prescription drug costs capped at $2,000 next year for the first time.
