Medicare Advantage plans with $0 premiums are available to the vast majority of Medicare beneficiaries in 2015. Every year since 2009, at least 78% of Medicare beneficiaries have had access to a $0 premium Medicare Advantage plan with a drug component1. However, the availability of these plans has decreased every year since 20112. From 2014 to 2015, the total number of Medicare Advantage plans with a $0 premium in the United States dropped from 813 to 7263. HealthPocket examined Medicare Advantage plan data from 2014 and 2015 to determine which counties lost or gained $0 premium Medicare Advantage plans in 2015.
HealthPocket found that 2793 counties had $0 Medicare Advantage plans in 2014 and 2680 counties had $0 Medicare Advantage plans in 2015, a difference of 113 counties. There were 16 counties that had $0 Medicare Advantage plans in 2015 but not 2014. These counties were in the states of California, Maryland, New Hampshire, New Jersey, Oregon, and Washington.
There were 129 counties that had $0 Medicare Advantage plans in 2014 but not 2015. These counties were in the states of California, Hawaii, Idaho, Iowa, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, Oregon, Utah, Vermont, Washington, and Wyoming. Nebraska had the most counties (36) with $0 Medicare Advantage plans in 2014 but not 2015, followed by Montana (25), Idaho (23), California (12), and Vermont (8).
The only states that did not have any $0 Medicare Advantage plans in both 2014 and 2015 were Delaware and Alaska. Delaware had Medicare Advantage plans, but no plans with a $0 premium. Alaska did not have any Medicare Advantage plans in 2014 or 2015.
From 2014 to 2015, Medicare payment rates to Medicare Advantage plans increased 0.4% overall4, but payment rates varied depending on quality ratings. McKinsey & Company estimated that plans rated fewer than 4 stars would have a 1.5% reduction in margins, while plans rated 4 or more stars would have up to a 2.5% increase in margins5.
HealthPocket compared 2015 quality ratings for three categories of Medicare Advantage plans that were available in both 2014 and 2015: plans that had $0 premiums in both 2015 and 2014, plans that had $0 premiums in 2014 but not 2015, and plans that had $0 premiums in 2015 but not 20146. Among these three categories of plans, quality ratings were lowest overall for Medicare Advantage plans with $0 premiums in 2014 but not 2015.
Among star-rated Medicare Advantage plans that had $0 premiums available in 2014 but not 2015, 39% had ratings of at least 4 stars and 61% had ratings below 4 stars. The median and mode rating were both 3.5 stars, and the average rating was 3.61 stars.
Star ratings were higher for Medicare Advantage plans that had $0 premiums available in 2015 but not 2014. The median and mode rating were both 4 stars, while the average rating was 3.83 stars. 67% of these plans had ratings of at least 4 stars and 33% had ratings below 4 stars.
The average rating for Medicare Advantage plans that had $0 premiums available in both 2015 and 2014 was 3.84 stars, with a median and mode of 4 stars. 58% of these plans had ratings of at least 4 stars and 42% had ratings below 4 stars.
Although most Medicare beneficiaries had access to $0 Medicare Advantage plans, over 100 counties lost $0 plans in 2015. HealthPocket found that the number of counties with $0 Medicare Advantage plans dropped from 2793 in 2014 to 2680 in 2015. In particular 129 counties lost $0 premium Medicare Advantage plans in 2015 and 16 counties gained $0 premium Medicare Advantage plans.
The CMS announced in April that the star rating system would be updated to strengthen its accuracy7 and that Medicare payments to Medicare Advantage plans would increase 3.25% overall from 2015 to 20168. This payment increase may lead to wider availability of $0 premiums, lower out-of-pocket costs, or additional benefits for enrollees in 2016 Medicare Advantage plans.
The Medicare Advantage plans in this analysis include approved contracts/plans available in 2014 or 2015 in the United States, including the 50 states and the District of Columbia. Sanctioned plans are included. PACE, Special Needs Plans, Part B Only Plans, Employer Sponsored Plans (800 series), and Medicare/Medicaid Plans are excluded. Premium data for Medicare Advantage plans is from the 2014 and 2015 MA landscape source files.
Some Medicare Advantage plans are available in different geographic regions for different premiums. Of the 726 Medicare Advantage plans in 2015 with $0 premiums in at least one geographic region, only 13 plans had nonzero premiums in some other geographic region. The map was generated using state9 and county10 boundary files for the United States from Google Fusion Tables.
Star ratings were compared for plans that had $0 premiums in both 2015 and 2014, in 2014 but not 2015, and in 2015 but not 2014. Only plans that were available in both 2014 and 2015 were included in the star rating comparison.
This analysis was written by Jesse Geneson, data scientist at HealthPocket. Correspondence regarding this study can be directed to firstname.lastname@example.org.
1 Gretchen Jacobson, Anthony Damico, Tricia Neuman, Marsha Gold. Medicare Advantage 2015 Data Spotlight: Overview of Plan Changes. December 10, 2014. http://kff.org/medicare/issue-brief/medicare-advantage-2015-data-spotlight-overview-of-plan-changes
3 These totals include plans that had a $0 premium in at least one geographic area.
4 Strengthening Medicare Advantage. 2014-04-07. http://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2014-Fact-sheets-items/2014-04-07.html
5 2015 Medicare Advantage rates: perspectives for payors. McKinsey & Company. http://healthcare.mckinsey.com/sites/default/files/McKinsey%20Reform%20Center_MA%20rate%20trends_%20April%202014.pdf
6 Of the 813 Medicare Advantage plans that offered a $0 premium in 2014 in at least one geographic area, 547 plans had $0 premiums in some geographic area in 2015. 105 plans with $0 premiums in 2014 had no $0 premiums in 2015, and 161 plans with $0 premiums in 2014 were not available in 2015. Of the 726 Medicare Advantage plans with a $0 premium in 2015, 164 plans were not available in 2014 and 15 plans were available with nonzero premiums in 2014.
8 Fact Sheet: Moving Medicare Advantage and Part D Forward. 2015-04-06. https://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2015-Fact-sheets-items/2015-04-06.html
9 State KML. https://www.google.com/fusiontables/data?docid=17aT9Ud-YnGiXdXEJUyycH2ocUqreOeKGbzCkUw
10 United States counties. https://www.google.com/fusiontables/data?docid=1xdysxZ94uUFIit9eXmnw1fYc6VcQiXhceFd_CVKa#map:id=2
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