InfoStat | 03-19-15

Medicare Advantage in Poorest Counties Average Lower Premiums but Higher Deductibles than Nation

25 poorest counties evidence substantial disparities in Medicare Advantage options

A graphic of all county borders on a U.S. map

Over 16 million Americans are enrolled in Medicare Advantage plans1 and a recent AHIP study claimed a slightly higher percentage of low income enrollees were in Medicare Advantage plans as compared to traditional Medicare coverage.2 The same study also noted that Medicare Advantage plans overall had higher enrollment among African Americans and Hispanics than traditional Medicare and that more than half of Medicare Advantage enrollees were women.3

HealthPocket examined standard Medicare Advantage plans4 in the 25 counties with the lowest per capita income according to U.S. Department of Commerce Bureau of Economic Analysis.5 The Medicare Advantage plans in these 25 counties were then compared to national Medicare Advantage trends to determine if Medicare Advantage plans in the poorest counties had significant differences in average premium, average drug deductible, and access to $0 premium plans. The analysis examined the plans without any premium or cost-sharing reductions given to qualifying individuals through the Low Income Subsidy program.6

Premiums

Unlike many other forms of private health insurance, Medicare Advantage premiums are not adjusted for the age of the insured. Accordingly, the quoted premium for a given plan within a county applies to all enrollees, with the exception of those whose income and resources qualify for the Low Income Subsidy program.

The national average premium for Medicare Advantage plans is $63.7 In comparison, the average premium for Medicare Advantage plans in the 25 counties with the lowest per capita income was $54, 14% lower than the national average. However, there was considerable variation in average premiums across the 25 counties examined. Three counties in South Dakota (Ziebach, Buffalo, and Todd) all had average premiums for Medicare Advantage plans that were twice as high as the national average. On the other end of the premium spectrum, Medicare Advantage plans in Hancock Tennessee had average premiums that were 83% lower than the national average.

Some Medicare Advantage plans have a $0 premium. This $0 premium is possible because of the government’s reimbursement rates to Medicare Advantage insurance companies. Enrollees in $0 premium plans are still responsible to pay their normal Medicare Part B premium option.

Nationally, about 26% of all Medicare Advantage plans have $0 premiums. Approximately, 78% of Medicare beneficiaries have access to a $0 premium Medicare Advantage plan.8 Similarly, access to $0 premium plans was available in 80% of the counties analyzed. However, the majority of the 25 counties that had access to $0 premium Medicare Advantage plans had $0 premium plans missing prescription drug coverage. The percentage of the 25 counties that had at least one $0 premium Medicare Advantage plan with drug coverage was only 40%.

Drug Deductibles

Unlike premiums, the average Medicare Advantage drug deductibles in the 25 counties with the lowest per capita income were considerably higher than the national average. At $178, the drug deductibles in the 25 counties were 37% higher than the national average of $130.9 The maximum allowable drug deductible for a 2015 Medicare Advantage plan is $32010 and some individual Medicare Advantage plans within these regions had deductibles that high.

When comparing average drug deductibles among the 25 counties, two counties in Georgia tied for the highest average. Both Johnson County and Hancock County Georgia had an average drug deductible of $289. Madison County, Idaho, had the lowest average drug deductible for Medicare Advantage plans at $40.

Town By Town Averages

Below are the average Medicare Advantage premiums and drug deductibles for each of the 25 U.S. counties with the lowest per capita income. Special Needs Plans with restricted eligibility criteria were not included within the averages.

LocationCounty Average PremiumCounty Average Drug Deductible
Ziebach, SD$127$183
Buffalo, SD$127$183
Todd, SD$127$183
Shannon, SD$122$200
Crowley, CO$84$76
Madison, ID$82$40
Elliott, KY$66$205
Lewis, KY$58$156
McCreary, KY$58$156
Jackson, KY$47$156
Johnson, GA$46$289
Hancock, GA$41$289
Adair, OK$40$99
Wheeler, GA$40$272
Telfair, GA$37$281
Zavala, TX$37$192
Charlton, GA$34$248
Long, GA$34$248
Schley, GA$34$227
Lafayette, FL$22$150
Hamilton, FL$22$150
Starr, TX$21$159
Hidalgo, TX$18$155
Union, FL$16$120
Hancock, TN$11$42

Conclusion

Medicare Advantage continues to be a very popular insurance option among Medicare beneficiaries. The examination of Medicare Advantage plans across the 25 poorest counties revealed some encouraging premium trends and less encouraging drug deductible trends, particularly for those Medicare beneficiaries who do not qualify for the Low Income Subsidy.

More detailed county-specific analysis reveals that Medicare Advantage plans in some of the poorest counties have average premiums and deductibles significantly higher than the trends observed nationally. For those beneficiaries in these counties who qualify for the Low Income Subsidy, this is not a major concern. For those who do not qualify for the subsidy, the less rigorous Medicare Advantage price competition represents yet another economic challenge within these regions.

Methodology

Data on the 25 U.S. counties with the lowest per capita income was obtained from the U.S. Department of Commerce Bureau of Economic Analysis on March 10, 2015. The counties included in the study (based on the government income data) were:

  • Telfair, GA
  • Wheeler, GA
  • Charlton, GA
  • Crowley, CO
  • Lafayette, FL
  • Union, FL
  • Long, GA
  • Hamilton, FL
  • Starr, TX
  • Elliott, KY
  • Shannon, SD
  • Jackson, KY
  • Johnson, GA
  • Zavala, TX
  • McCreary, KY
  • Ziebach, SD
  • Hancock, TN
  • Schley, GA
  • Todd, SD
  • Lewis, KY
  • Hancock, GA
  • Buffalo, SD
  • Adair, OK
  • Madison, ID
  • Hidalgo, TX

Medicare Advantage premium and deductible data for standard Medicare Advantage plans came from the 2015 edition of the Prescription Drug Plan Formulary, Pharmacy Network, and Pricing Information Files from the Centers for Medicare & Medicaid Services (CMS). Special Needs Plans (SNP) within the Medicare Advantage insurance category that have special eligibility criteria were not included in this study.

Medicare Advantage premium and deductible averages were first averaged at the county-level and then averaged among the 25 counties with the lowest per capita income. Drug deductibles were only averaged among Medicare Advantage plans that offered prescription drug coverage as a benefit.

Authors

This analysis was written by Kev Coleman, Head of Research & Data at HealthPocket. Data collection for 2015 Medicare Advantage plans within the 25 U.S. counties with the lowest per capita income was performed by Michael Bass and Kev Coleman. Additional data analysis on 2015 $0 premium plans was performed by Jesse Geneson. Correspondence regarding this study can be directed to Mr. Coleman at kevin.coleman@healthpocket.com.

Sources:

1 Gretchen Jacobson, Anthony Damico, Tricia Neuman, and Marsha Gold. “Medicare Advantage 2015 Data Spotlight: Overview of Plan Changes.” Kaiser Family Foundation. (Dec 10, 2014). http://kff.org/medicare/issue-brief/medicare-advantage-2015-data-spotlight-overview-of-plan-changes/ Last accessed March 13, 2015.
2 German Veselovskiy et al. “Medicare Advantage Demographics Report.” AHIP. (February 2015). p.3. The link to the report can be found within the press release at: https://www.ahip.org/News/Press-Room/2015/Medicare-Advantage-Remains-A-Critical-Lifeline-for-Low-Income,-Minority-Beneficiaries.aspx. Last accessed March 16, 2015.
3 Ibid.
4 Special Needs Plans (SNP) within Medicare Advantage that have special eligibility criteria were not included in this study.
5 Data on the 25 U.S. counties with the lowest per capita income was obtained from the U.S. Department of Commerce Bureau of Economic Analysis on March 10, 2015.
6 The Low Income Subsidy (LIS) program is also known as “Extra Help.” The Low Income Subsidy can assist with premiums, deductibles, and other prescription drug cost sharing. Qualifications for the Low Income Subsidy in 2015 include an income limit of $17,655 for an individual, $23,895 for a married couple living together. Resources must be limited to $13,640 for an individual, $27,250 for a married couple living together. http://www.ssa.gov/pubs/EN-05-10525.pdf
7 “The average premium nationwide for 2015 Medicare Advantage plans is $62.69.” http://www.healthpocket.com/medicare/medicare-advantage
8 Gretchen Jacobson, Anthony Damico, Tricia Neuman, and Marsha Gold. “Medicare Advantage 2015 Data Spotlight: Overview of Plan Changes.” Kaiser Family Foundation. (Dec 10, 2014). http://kff.org/medicare/issue-brief/medicare-advantage-2015-data-spotlight-overview-of-plan-changes/ Last accessed March 13, 2015.
9 “The average drug deductible for 2015 Medicare Advantage plans is $129.87.” http://www.healthpocket.com/medicare/medicare-advantage
10 http://www.medicare.gov/part-d/costs/deductible/drug-plan-deductibles.html

{"globalPhoneNumber":"8009848015","helpInfo":{"leadCopy":"Speak with a licensed agent","phone":"8009848015","analyticsInfo":{"pageType":"content","productLine":"global","phone":"8009848015"}},"bannerData":{"link":"Click Here for Affordable Term Health Plan Options","href":"https://www.agilehealthinsurance.com/?xsell=1&utm_source=healthpocket&utm_medium=leader_board&utm_campaign=ifp_seo_page_banner","text":"Missed the Obamacare Enrollment Period? "}}