Introduction
Medicare Annual Open Enrollment period, also known as Annual Election Period (AEP), occurs between October 15 – December 7 each year. During this period you may freely switch between plans including moving from Original Medicare to Medicare Advantage (and vice versa).
You may have already received a significant number of marketing materials leading up to AEP. Here’s what you need to know about Medicare for 2021.
#1: Expected Record Enrollment in Medicare Advantage as popularity rises
Medicare Advantage plans continue to gain popularity around the country as they provide an “all-in-one” bundled alternative to Original Medicare and often come with prescription drug coverage as well as extra benefits that Original Medicare does not cover such as vision, dental, hearing, and more.
For 2021, the Centers for Medicare & Medicaid Services (CMS) estimates that 42% of Medicare beneficiaries will be enrolled in Medicare Advantage — this is a significant increase from 36% in 2020 and represents around 2,500,000 new enrollees (bringing total Medicare Advantage enrollees to 26.9 million people).
If you are currently on Original Medicare and have not considered Medicare Advantage it may be worthwhile assessing your options this AEP. The average number of Medicare Advantage plan choices per county is growing and will increase from about 39 plans in 2020 to 47 plans in 2021.
This means more choice as well as more competition from insurance companies to deliver you more benefits. Benefits continue to improve each year and you might find coverage that better meets both your health and your financial situation.
#2: Average premiums for Medicare Advantage plans are the lowest they have been in 14 years
According to CMS, Medicare Advantage beneficiaries will pay an average plan premium of around $21.00 per month which is 11% lower than the average plan premium of $23.60 per month in 2020 (and 34% percent lower than 2017’s average premium of about $32 per month).
The CMS highlights that this is the lowest average Medicare Advantage monthly plan premium expected in over 14 years (since 2007).
This makes Medicare coverage even more affordable for those who may want to consider Medicare Advantage plans as their method of accessing Medicare. However, don’t forget, many carriers also offer $0 premium plans.
As for Part D (prescription drug plans), the average basic Part D premium will be approximately $33.37 in 2022 which will be the lowest since 2013. The CMS notes that since 2017, the trend of lower Part D premiums meant that beneficiaries have saved approximately $3.4 billion in combined Medicare Advantage and Part D premium costs.
#3: Medicare Advantage supplemental benefits continue to expand
In 2019, the CMS allowed for additional flexibility for Medicare Advantage plans to deliver supplemental benefits that target beneficiaries’ social needs.
These offerings have continued to grow over the last few years and carriers are continuing to add more extra benefits to help attract beneficiaries to their plans.
For example, according to the CMS, in 2021:
- 730 plans will provide 3 million Medicare Advantage enrollees with primary health-related supplemental benefits, such as adult day health services, caregiver support services, in-home support services, therapeutic massage, or home-based palliative care.
- 920 plans reaching 4.3 million beneficiaries will offer non-primarily health-related benefits tailored to people with chronic conditions that may help them better manage their disease(s) such as pest control, home cleaning services, meal home delivery, and transportation for non-medical reasons such as trips to the grocery store.
- Over 440 Medicare Advantage plans will be participating in CMS’s Value-Based Insurance Design Model (VBID) initiative. The VBID reflects CMS’s aim to test plan innovations that both enhance the quality of care for beneficiaries and lower long-term costs by encouraging them to use the services that can benefit them the most. In 2021, over 1.6 million beneficiaries will receive additional benefits such as healthy foods and meals, transportation support, reduced cost-sharing, and other rewards and incentives.
#4: Increased telehealth access across Medicare Advantage plans and broadening Medicare-covered telehealth services
In 2021, the CMS highlights that 94% of Medicare Advantage plans will offer additional telehealth benefits in 2021 reaching 20.7 million beneficiaries, up from about 58% of plans offering telehealth benefits in 2020.
While not specific to only 2021 plans, the CMS has also continued adding coverage for Medicare-covered telehealth services to enable Medicare beneficiaries to more easily access care during the COVID-19 pandemic.
Since the beginning of the COVID-19 crisis, CMS has added over 140 services to the Medicare telehealth services list – such as emergency department visits, initial inpatient and nursing facility visits, and discharge day management services. As of October 2020, there were 249 covered services, including 146 temporarily added because of the COVID-19 pandemic. You can find the full list of covered telehealth services here.
#5: Over 1,600 Part D plans will offer Insulin for $35 per month copays or less
2021 will be the first year of the federal government’s ‘Part D Senior Savings Model‘ program. This model was announced in May 2020 and goes into effect on January 1, 2021.
The model is designed to help 3.3 million Americans address the out-of-pocket cost variability that consumers enrolled in Part D traditionally faced in affordably access for insulin, by capping the cost of a 30-day supply for most insulins to a maximum of $35.
In 2021, over 1,600 prescription drug plans are participating in the savings model. For Medicare beneficiaries enrolling in these plans, their out of pocket costs for their monthly insulin prescription will be $35 or less during the deductible, initial coverage, and coverage gap ‘phases’ for Part D. The participating plans include both Medicare Advantage plans with prescription drug coverage (MA-PDs) as well as standalone Prescription Drug plans (PDPs).
The CMS estimates that beneficiaries who take insulin and enroll in a plan participating will save an average of $446 in annual out-of-pocket costs on insulin, or over 66%, relative to their average cost-sharing today.
If you are one of the 3.3 million Medicare beneficiaries who use one or more of the common forms of insulin, there are plenty of reasons to compare coverage options for this AEP.
#6: Medicare Advantage plans accepting End-stage Renal Disease (ESRD) applicants
Prior to 2021, individuals with kidney failure (or End-Stage Renal Disease (ESRD)) were not eligible to enroll in a Medicare Advantage plan (unless they were already in one when they developed ESRD). However, a provision of the 21st Century Cures Act now allows those with ESRD to apply for MA coverage for 2021 and beyond. Kidney failure affects more than 500,000 Medicare beneficiaries and CMS expects that the number of Medicare Advantage members with ESRD will increase by 63% by 2026.
Final Words
Believe it or not, the Annual Election Period is already here and we are closing in on 2020. We always recommend that you check your options every year as plan benefits can often change from one year to the next. In particular, you may find that drug formularies (or list of covered drugs) that your prescription drug plan may change or that your doctor is no longer considered ‘in network’ if you are in a Medicare Advantage plan. Overall, there are more choices in 2021, and a number of benefits previously not accessible through Medicare Advantage plans will be more widely available across the country. For Medicare beneficiaries with diabetes, the Part D Savings Senior Model will reduce your costs significantly and you should make sure you shop for a plan if you require insulin treatment.
