CMS Announces Low Medicare Advantage & Part D Premiums in 2021

Recently, the Centers for Medicare & Medicaid Services (CMS) released their annual estimate for Medicare Part C and D plan premiums. This year’s announcement follows in the footsteps of the last few years’ press releases, touting there will be low premiums for both types of plans, offered by private insurance companies. But, just how low?

We’re covering these estimated Medicare Advantage and prescription drug plan costs, along with some other program projections, in more detail below!

Information in this article can be found in the September 24, 2020, and July 29, 2020, CMS press releases or in a previous year’s reporting, unless specifically linked elsewhere. This announcement comes weeks before the Annual Enrollment Period kicks off, giving you plenty of time to begin exploring options, which you can also expect to increase, according to the press release.

Medicare Advantage

This coming year, beneficiaries can expect to see the average premium for Medicare Advantage plans drop about 11 percent from last year’s $23.63 per month, down to $21 per month. Should this estimated average turn out to be correct, it would bring Medicare Advantage’s premiums to their lowest average point since 2007. But remember, this is only a prediction, since individual companies can set their own prices. If you want to see a breakdown of state-specific changes and year-over-year comparisons, you can find it on CMS’ website.

CMS expects the number of beneficiaries enrolled in Part C plans to reach a projected 26.9 million Americans — a record high!

That wasn’t the only positive Medicare Advantage related news announced last week. CMS expects the number of beneficiaries enrolled in Part C plans to reach a projected 26.9 million Americans — a record high! This would represent a 2.5 million beneficiary growth, or a 10.25 percent increase in beneficiaries, from 2020’s 24.4 million Americans. Medicare Advantage plan choice is also said to be on the rise, giving Medicare enrollees more options to choose from when they’re shopping for a plan. CMS is anticipating 4,800 plans options for the upcoming open enrollment period, up 500 plans from 2020. This represents an 11.6 percent increase in national plans in one year. Each county will also see an average of eight new plans this year, from 39 plans in 2020 to 47 in 2021.

Furthermore, Medicare Advantage plans continue to see coverage growth. In 2021, 94 percent of plans will offer some form of coverage for telehealth services, a staggering 36 percent increase from 2020. Other plans are offering increased coverage for services like palliative care, reduced cost-sharing for certain chronic conditions, and increased access to preventative care. To explore what Medicare Advantage plans are in your area, check out Medicareful’s plan finder tool!

Medicare Part D

CMS projects Medicare Part D’s estimated average plan premium to see a minimal increase in 2021, raising to $30.50 per month. This is only a 1.67 percent increase from 2020’s $30 a month projected average, which was the lowest premium projection in a seven-year span. It does break a three-year streak of lower monthly premiums for Part D, however.

The Part D Senior Savings Model proposes to lower the amount beneficiaries pay for prescriptions by standardizing the payments.

In more positive news, this marks the second year in a row that CMS anticipates premiums to be below $31 despite the fifty-cent increase. This increase will likely be offset by a number of programs run through CMS, like the Part D Senior Savings Model. This program proposes to lower the amount seniors and Medicare Part D beneficiaries pay for prescriptions by standardizing the payments. The initial test model will be enacted in 2021 with a maximum copay for monthly insulin prescriptions set to $35. Should this prove successful, the goal will be to expand similar benefits to other prescriptions. With the program, CMS anticipates to save the average beneficiary $446 in annual out-of-pocket costs and the federal government upwards of $250 million annually.

For a look at some of the Part D plans available in 2021, you can use Medicareful’s plan finder to do a more targeted search and directly compare plans.

What to Expect

Right now, it’s important to remember that not only are these predictions from CMS, they’re also averages. Since private companies offer the plans, the plans can differ in premium and coverage. This means that not every plan will be exactly $21 or $30.50 per month. Some may cost less, some may cost more. It’s important to compare both the costs and the coverage when looking at plans.

As soon as Original Medicare’s costs for 2021 are available, we’ll have them posted for you, so be sure to keep checking back.

If you wish to know your full options, you may also want to look into Original Medicare and Part D coverage and possibly a Medicare Supplement plan. While the costs for Original Medicare in 2021 have yet to be announced, they’re anticipated to be released in the coming weeks. As soon as they are, you can expect we’ll have something posted for you, so be sure to keep checking back.

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If you want to learn more about your options and the general details about Medicare Part C and D in 2021, CMS has a thorough breakdown of Medicare Advantage and Part D estimates and predictions for each state on their website. You can also go to Medicareful to explore your options or get in touch with a licensed insurance agent who can guide you through enrollment this AEP.