CMS Says 2016 Average MA Premiums To Drop by 31 Cents

On Monday, CMS announced that the average monthly premium for Medicare Advantage plans in 2016 will drop by about 31 cents, Modern Healthcare reports (Herman, Modern Healthcare, 9/21).

According to CMS, average MA premiums will likely decrease from an average of $32.91 this year to $32.60 next year (Young, CQ HealthBeat, 9/21). MA premiums are expected to drop by almost 10% between 2010 and 2016, CMS said (CMS release, 9/21).

In addition, CMS said the majority of MA beneficiaries, or about 59%, will not see any premium increases next year. CMS Deputy Administrator Sean Cavanaugh in a statement said the flat rates show that Medicare beneficiaries are "benefiting from a transparent and competitive marketplace."

Flat Premiums Could Attract More Customers

According to CQ HealthBeat, the stable MA premium rates could draw more beneficiaries to enroll in MA plans (CQ HealthBeat, 9/21).

According to Modern Healthcare, about 95% of MA beneficiaries currently live in areas where at least one available MA plan does not charge a monthly premium. Tom Kornfield, a vice president at Avalere, said, "The $0 premium is a very important product," adding, "It is critical for [MA] plans, and they've been able to maintain this despite changes in reimbursement cuts post-ACA" (Modern Healthcare, 9/21).

CMS said that nearly one-third of Medicare beneficiaries, or 17.4 million people, likely will be enrolled in MA plans by 2016 (CQ HealthBeat, 9/21). About 34 million individuals are currently enrolled in traditional Medicare coverage (Modern Healthcare, 9/21).