Based on the Medicare Part D plan carrier bids and plan enrollment, the 2019 average weighted basic monthly premium is projected to be around $32.50 per month, a decrease of around $1.09 from the actual 2018 average Medicare Part D premium of $33.59 (as noted below, $33.50 was projected last year).
As reference, last year, CMS estimated the 2018 average weighted basic monthly premium to be $33.50 per month - a projected decrease of approximately $1.20 from the $34.70 actual average premium reported in 2017.
Does the projected decrease in average Medicare Part D premiums mean you will pay less for your 2019 Medicare Part D plan?
Not exactly. The average monthly Medicare Part D premium figure released by CMS may not reflect the actual changes you see in your 2019 Medicare Part D prescription drug plan premiums - or overall coverage.
The 2019 average projected premiums reported by CMS suggests that you should be able to shop around and find a stand-alone 2019 Medicare prescription drug plan with about the same monthly premium as you currently have now, or you may want to consider changing enrollment to a low-premium Medicare Advantage plan that includes prescription drug coverage (MAPD).
Starting in October, people with Medicare Part D can begin to research their Medicare health and prescription plan options. During the annual Open Enrollment Period (AEP) that begins Monday, October 15th and ends Friday, December 7, 2018, beneficiaries can switch Medicare plans by enrolling in their newly selected plan. If you are not sure where to begin with the annual plan review process, you can start by calling a Medicare representative at 1-800-MEDICARE for more information.
In addition, everyone with a Medicare Part D or Medicare Advantage plan should review their Medicare plans Annual Notice of Change Letter (ANOC) that will be mailed late-September or early-October. Even if your Medicare Part D plan premium remains stable (or decrease like the CMS projection) – this does not mean that your 2019 Medicare plan’s drug coverage will not change. Your Medicare drug plan's prescription coverage (which drugs are covered and at what cost) can (and usually does) change every year, even if your monthly Medicare plan premium remains the same.
Finally, Medicare Part D plan members should review their 2019 Evidence of Coverage (EOC) document mailed by their Medicare plan around October 15th.
How have projected Medicare Part D premiums changed over time?
The following are the annual projected basic Medicare Part D premiums weighted by enrollment reported by HHS or CMS since 2006. The actual annual average Medicare Part D premiums reported by Medicare may be slightly higher or lower depending on actual plan enrollment for the year (for example, the actual 2018 average premium was $33.59 as compared to the projected average premium of $33.50).
Estimated basic stand-alone Medicare Part D premiums 2006 to 2019 weighted by Medicare plan enrollment
How does the CMS estimated average weighted Medicare Part D premium compare to actual Medicare Part D premiums?
You may notice that the projected average basic Medicare Part D premiums reported by CMS are usually lower than the average Medicare Part D premiums we show in our any PDP landscape analysis or PDP-Facts area. The differences in the average premium figures is because we only consider stand-alone Medicare Part D prescription drug plans (PDPs) in our average premium calculations (or calculations showing average premiums weighted by plan enrollment). We do not group the premiums for Medicare Advantage plans offering prescription drug coverage (MAPDs) with stand-alone Medicare Part D plans (PDPs). We separate our PDP and MAPD analysis for several reasons:
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First, Medicare Part D plans (PDPs) are offered on a statewide (or multi-state regional)
basis and Medicare Advantage prescription drug plans (MAPDs) are
offered within much smaller service areas (ZIP code, partial-ZIP, or
county basis) - and more MAPDs are available in densely populated areas
where Medicare plans can easily establish healthcare networks as
compared to rural areas. So MAPDs may not be widely available to all
Medicare beneficiaries in a state. (As a note, in Alaska, there are no Medicare Advantage plans (MA or MAPD) available anywhere in the state).
- In addition, many popular MAPDs have a low or $0 premium and these low premiums tend to skew the average weighted monthly premium for prescription drug coverage toward lower values that are not reflective of the stand-alone Medicare Part D plan (PDP) landscape. In short, a national average of combined PDP and MAPD premiums weighted by enrollment may not reflect actual stand-alone Medicare Part D plan premiums.
So how do the CMS projected Medicare Part D premiums actually compare to the stand-alone Medicare Part D (PDP) plan landscape?
Considering only the stand-alone Medicare Part D landscape, here are our calculations for average Medicare Part D plan premiums from the past several years along with a chart showing the variation with CMS estimated Medicare Part D plan premiums - (Spoiler alert: From 2015 to 2018, we are seeing a slight increase in actual average enrollment-weighted stand-alone Medicare Part D premiums - and this may indicate people are either choosing more expensive stand-alone Medicare Part D plans or staying with their Medicare plan even when their premiums increase and lower-premium plan alternatives are available. Again, we are not considering low-costing or $0 premium Medicare Advantage plans (MAPDs).):
- We calculated the 2018 average monthly premium across all
stand-alone Medicare Part D plans (not considering Medicare Advantage
plans offering prescription drug coverage or MAPDs) to be $52.69 - or $43.69
when weighted by stand-alone Medicare Part D plan enrollment. Please
note that "enrollment weighting" can change throughout the plan year as
Medicare plans are sanctioned (and plan members leave the plan) or CMS
lifts Medicare plan sanctions and the plan resumes enrollment or plan
members use a Special Enrollment Period (SEP) to change Medicare plans mid-year. (updated 09/29/2017)
- We calculated the 2017 average monthly premium across all
stand-alone Medicare Part D plans (not considering Medicare Advantage
plans offering prescription drug coverage or MAPDs) to be $51.96 or $42.70
when weighted by stand-alone Medicare Part D plan enrollment.
Please note that "enrollment weighting" can change throughout the plan
year as Medicare plans are sanctioned or removed from sanctions.
(updated 08/02/2017)
- We calculated the 2016 average monthly premium across
all stand-alone Medicare Part D plans (not considering Medicare
Advantage plans offering prescription drug coverage or MAPDs) to be $53.83 or $39.08
when weighted by stand-alone Medicare Part D plan enrollment
(note: the "enrollment weighting" can change throughout the plan
year as Medicare plans are sanctioned or removed from sanctions).
- We calculated the 2015 average monthly premium across
all stand-alone Medicare Part D plans (not considering Medicare
Advantage plans offering prescription drug coverage or MAPDs) to be $53.14 or $36.75 when weighted by stand-alone Medicare Part D plan enrollment.
- We calculated the 2014 average monthly premium across
all stand-alone Medicare Part D plans (not considering Medicare
Advantage plans offering prescription drug coverage or MAPDs) to be $53.80 or $41.23 when weighted by stand-alone Medicare Part D plan enrollment.
- We calculated the 2013 average monthly premium across all stand-alone Medicare Part D plans to be $53.26 or $40.63 when weighted by all stand-alone Medicare Part D plan enrollment.
- We calculated the 2012 average premium across all stand-alone Medicare Part D plans to be $53.99 or $39.62 when weighted by plan enrollment.
- In 2011, we calculated the average monthly premium across all stand-alone Medicare Part D plans as $53.77 -- or $41.05 when weighted by Medicare Part D plan enrollment.
Bottom Line: Medicare Part D plans change each year, so please be prepared to review your 2019 Medicare plan options starting in early October.
The full text of the July 31, 2018 CMS Press Release is included below:
Medicare Part D premiums continue to decline in 2019
Today, the Centers for Medicare & Medicaid Services (CMS) announced that, for the second year in a row, the average basic premium for a Medicare Part D prescription drug plan in 2019 is projected to decline. At a time when health insurance premiums are rising across-the-board, basic Part D premiums are expected to fall from $33.59 this year to $32.50 next year.
“President Trump and Secretary Azar have made clear that prescription drug costs must come down. The actions that HHS and CMS are taking to increase competition in order to drive down costs for patients are working,” said CMS Administrator Seema Verma. “CMS will continue to strengthen the Part D program and bolster plans’ negotiating power so they can get the best deal for seniors from prescription drug manufacturers.”
In Medicare Part D, beneficiaries choose the prescription drug plan that best meets their needs, and plans have to improve quality and lower costs to attract beneficiaries. This competitive dynamic sets up clear incentives that drive towards value, as determined by beneficiaries. Earlier this year, CMS announced several changes in the Part D program aimed at further empowering Part D plans to drive a hard bargain with drug manufacturers and lower the cost of prescription drugs. Strengthening negotiations is a key pillar of the Administration’s Blueprint to reduce prescription drug costs. CMS has been working to ensure that Medicare Part D plans can leverage all of the tools that are available to commercial plans in negotiations.
Changes that CMS has made to date include:
- Reducing the maximum amount that low-income beneficiaries pay for certain innovative medicines known as “biosimilars.”
- Allowing for certain generic drugs to be substituted onto plan formularies more quickly during the year, so beneficiaries immediately benefit and have lower cost sharing.
- Increasing competition among plans by removing the requirement that certain Part D plans have to “meaningfully differ” from each other, making more plan options available.
- Increasing competition among pharmacies by clarifying the “any willing provider” requirement, to increase the number of pharmacy options that beneficiaries have.
The upcoming annual Medicare open enrollment period for 2019 begins on October 15, 2018, and ends on December 7, 2018. During this time, Medicare beneficiaries can choose health and drug plans for 2019 by comparing their current coverage and plan quality ratings to other plan offerings, or they can choose to remain in traditional Medicare. The agency will be continuing to improve the website for Medicare plan selection, so beneficiaries can more easily compare options and choose the plan that best meets their needs. CMS anticipates releasing the premiums and costs for Medicare health and drug plans for the 2019 calendar year in mid-to-late September.
To view the 2019 Part D base beneficiary premium, the Part D national average monthly bid amount, the Part D regional low-income premium subsidy amounts, the de minimis amount, the Part D income-related monthly adjustment amounts, the Medicare Advantage employer group
waiver plan regional payment rates, and the Medicare Advantage regional PPO benchmarks, visit: www.cms.gov/Medicare/ Health-Plans/MedicareAdvtgSpecRateStats/ Ratebooks-and-Supporting-Data.html and select “2019.”
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Contact: CMS Media Relations press@cms.hhs.gov[Emphasis and Highlighting added]
(https://www.cms.gov/Newsroom/ MediaReleaseDatabase/Press-releases/ 2018-Press-releases-items/2018-07-31.html)