The Centers for Medicare and Medicaid Services (CMS)
in their press release entitled, "CMS Releases 2022 Projected Medicare Part D Average Premium", that the average basic monthly Medicare Part D plan premium is expected to increase slightly.
Based on the 2022 Medicare Part D plan bids and current Medicare drug plan (PDP and MAPD
) enrollment, the 2022 average weighted basic monthly premium is projected to be approximately $33 per month - an increase of $2.50 from the $30.50 per month premium projected for 2021
Question: Does the projected increase in projected average Medicare Part D premiums mean you will pay more for your 2022 Medicare Part D plan?
The average monthly Medicare Part D premium figure released by CMS may not reflect
the actual changes you see in your 2022 Medicare Part D prescription drug plan premiums - or overall coverage.
The CMS projected 2022 average premium of $33.01 suggests that you should be
able to shop around during the annual Open Enrollment Period and find a stand-alone 2022 Medicare prescription drug plan (PDP) with about the same monthly premium as you currently have now,
or you may want to consider changing enrollment to a low-premium (or $0 premium) Medicare Advantage
plan that includes prescription drug coverage (MAPD).
In addition, our analysis (see below) shows that, although average (unweighted) Medicare Part D plan premiums have been decreasing for the past few years, the average stand-alone Medicare Part D (PDP-only) premium weighted by plan enrollment has been increasing
, perhaps indicating that Medicare beneficiaries are choosing Medicare Part D plans with higher premiums or staying with their same plans although their plan premiums have increased.
Question: When can I see the 2022 Medicare Part D and Medicare Advantage plans?
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 October 15th and ends December 7, 2021, 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.
Question: Will my 2021 Medicare Part D plan inform me about 2022 plan changes?
Everyone with a Medicare Part D or Medicare Advantage plan should review their Medicare plan's Annual Notice of Change letter (ANOC
) that will be mailed in late-September. Even if your Medicare Part D plan premium remains stable (or decrease) – this
does not mean that your 2022 Medicare plan’s drug coverage costs will decrease. Your
Medicare drug plan's prescription coverage - which drugs are covered and
at what cost - usually changes every year
, even if your monthly Medicare plan premium remains the same or decreases slightly.
Finally, Medicare Part D plan members should review their Medicare plan's 2022 Evidence of Coverage (EOC) document mailed to them in early-October - or made available electronically for download. The EOC is a 200+ page document that includes detailed information about the Medicare plan's coverage.
Medicare Part D plans change each year, so please be
prepared to review your 2022 Medicare plan options starting in early
Question: How have projected Medicare Part D premiums changed over time?
The following are Medicare's annual projected basic Medicare Part D premiums weighted by enrollment. The actual annual average Medicare Part D premium reported by Medicare may be slightly higher or lower than the projected premium depending on actual Medicare plan enrollment for the year (for example, the actual 2018 average premium was $33.59
as compared to the projected average Part D premium of $33.50).
Projected basic stand-alone Medicare Part D premiums 2006 to 2022 weighted by Medicare plan enrollment.
Question: How does the CMS estimated average weighted Medicare Part D premium compare to actual stand-alone Medicare Part D (PDP) premiums?
The projected average basic Medicare Part D premiums reported by CMS include both stand-alone Medicare Part D plans (PDPs) and Medicare Advantage plans that include drug coverage (MAPDs) - and are usually much lower than the actual average Medicare Part D premiums we report each year in our PDP landscape analysis or PDP-Facts
The difference between the CMS average premium projection and our analysis is because we only consider stand-alone Medicare Part D prescription drug plans (PDPs) in our premium calculations
(or calculations showing average premiums weighted by plan enrollment). Unlike CMS, we do not include the premiums for Medicare Advantage plans offering prescription drug coverage (MAPDs) with stand-alone Medicare Part D plans (PDPs) for several reasons:
Question: So how do the CMS projected Medicare Part D premiums actually compare to the stand-alone Medicare Part D (PDP) plan landscape?
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 low-premium 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 - except those offered in a small area by employer plans).
- 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 the actual stand-alone Medicare Part D plan premiums available to all seniors.
The following chart shows variations or trends in CMS projected basic Medicare Part D plan premiums (PDP and MAPD) as compared to our calculated average stand-alone Medicare Part D plan (PDP-only) premiums and stand-alone Medicare Part D plan (PDP-only) premiums weighted by plan enrollment.
Average premiums weighted by enrollment as compared to Average Premiums
Over time we have seen trends of increasing average stand-alone Medicare Part D (PDP) premiums weighted by plan enrollment (even though projected and average Medicare Part D premiums have been decreasing over the past few years) - and this increase in weighted premiums may indicate people are either choosing more expensive stand-alone Medicare Part D plans with additional coverage benefits (such as more generous formularies or formulary structures favoring fixed co-pays for popular drugs instead of co-insurance based on ever-changing retail drug prices) - or perhaps people are seeking stability and staying with their same Medicare Part D plans even when their premiums increase and lower-premium plan alternatives are available. Again, our average premiums are for PDPs only - we are not considering any Medicare Advantage plans (MAPDs) that may include low-costing or $0 premium MAPDs.
CMS estimated average basic Medicare Part D
premiums vs. actual weighted (and unweighted) stand-alone Medicare Part D
premiums from 2007 to 2022
CMS Releases 2022 Projected Medicare Part D Average Premium
The Centers for Medicare & Medicaid Services (CMS) today [July 29, 2021
] announced that the average basic monthly premium for standard Medicare Part D coverage is projected to be approximately $33 in 2022
. CMS releases the projected average basic monthly premium annually—calculated based on plan bids submitted to CMS—to help beneficiaries understand overall premium trends before open enrollment, when they can select from plan options for the upcoming benefit year.
The average 2022 basic Part D premium is projected to increase by 4.9% from $31.47 in 2021
. The projected average basic premium is calculated based on plans’ expectations of per capita drug spending in the coming year. CMS anticipates releasing the final 2022 premium and cost-sharing information for 2022 Medicare Advantage and Part D plans in mid- to late-September 2021.
The Medicare Part D program helps people with Medicare pay for both brand-name and generic prescription drugs. Part D remains one of Medicare’s most popular programs, with more than 48 million Medicare beneficiaries enrolled for prescription drug coverage. CMS continues to analyze changes to the Part D program carefully, and engages with stakeholders to identify opportunities for improvements, particularly for reducing costs. Driving down prescription drug costs remains a priority for the Biden-Harris Administration. Earlier this month, President Biden signed an executive order to increase competition, reduce drug costs, and reduce price gouging.
As part of today’s announcement, CMS is also releasing other information—such as the Part D national average monthly bid amount—to help Part D plan sponsors finalize their premiums and prepare for Medicare open enrollment. Medicare open enrollment for coverage beginning January 1, 2022 will run from October 15 to December 7, 2021.
For more information on the Part D national average monthly bid amount, the Part D regional low-income premium subsidy amounts, the de minimis amount, the Medicare Advantage employer group waiver plan regional payment rates, and the Medicare Advantage regional preferred provider organization benchmarks, visit: https://www.cms.gov/Medicare/Health-Plans/MedicareAdvtgSpecRateStats/Ratebooks-and-Supporting-Data.html.