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Lower Costs and More Options for Medicare Advantage in 2022

November 2021

Open enrollment for Medicare is underway. This is the annual election period designed to give people with Medicare a chance to review their coverage and make changes for the upcoming year. Whether you’ve got Original Medicare, a private drug plan through Part D or a Medicare Advantage plan, this is your best (and possibly only) chance during the year to update your coverage for 2022.

With more plan options and lower premiums for next year, this is a great time to make sure that what you’ve got is still working for you.

If you’re not someone who finds joy in shopping for coverage each year, you’re not alone. A whopping 71% of people said in a recent survey that they don’t shop during Medicare open enrollment, which means just under 3 in 10 people actually take the time to do it.

That’s a potentially costly mistake.

Unlike other forms of health insurance, premiums tend to go down with private Medicare plans, for both Medicare Advantage and standalone Part D plans. And with added benefits in recent years, there are good reasons to see what else is out there.

Need a reason to pull up your current plan and compare it to 2022 options? Here are a few good reasons to start shopping (if you haven’t already) during Medicare Open Enrollment.

There will be more Medicare Advantage plans overall.

Next year’s Medicare Advantage plans continue a recent trend in offering potentially broader benefits to a wider pool of people across the U.S. On average, states will see about 115 private plans in 2022, up from last year’s average of 106. That’s according to our analysis of state data from the Centers for Medicare and Medicaid Services (CMS), which administers the program.

Of course, plan options in each state vary widely.

Some states have hundreds of plans available. That includes more populous states like California (458), Florida (583) and Texas (337). On the opposite end of the spectrum, Wyoming has just 9 Medicare Advantage plans in 2022, though that is a 50% increase in the number of plans the state had last year (6).

Where you live continues to play an important role in your individual access to private Medicare plans.

The same holds true for Medicare Part D, where there’s an average of 22 plans per state in 2022 but where location makes a difference.

But when it comes to Part D, the average gives a closer idea as to individual state options. Most states have around this many offerings for Part D next year, with a high of 28 plans in Texas and a low of 19 plans in New York.

It’s worth noting that Part D plan availability has actually gone down somewhat for 2022, from an average of 29 plans nationwide last year to 22 in 2022. Kaiser Family Foundation, a nonprofit that researches and reports on healthcare, attributes this decline to plan consolidations from major carriers.

But with around 20 plan options in each state, there may be a better choice for you next year. It doesn’t hurt to take a look.

Costs are going down, as usual.

Health insurance rates don’t usually go down in other parts of the industry, but Medicare Advantage and Part D are exceptions. In 2022, the nationwide average premium for Medicare Advantage plans is just under $23 a month, according to our analysis of CMS state data. That’s down about $3 a month over last year’s average.

As with plan availability, though, averages don’t tell the whole story when it comes to Medicare Advantage. Some states will have higher premiums in 2022 than they did in 2021, and some states just have higher premiums period.

Generally speaking — though not always — states with more Medicare Advantage plans tend to have lower premiums. In Florida, for example, there are 583 Advantage plans in 2022 and the average premium is a little over $8.50 a month. In Nevada, where there are 94 plans for next year, the average premium is just over $3 a month, a nationwide low.

On the other end of the spectrum, states with fewer plan options tend to have higher average premiums. Wyoming has just 9 plan offerings in 2022 and an average monthly premium of about $48.

This isn’t a universal rule of thumb, though. Minnesota has the highest average premium for Medicare Advantage in 2022 at just under $77 a month. But the state has 101 plans, so it’s clear that other factors go into plan premiums and not just access to variety.

But overall, rates are going down next year.

Plus, most Medicare enrollees (99.6%) will have access to at least one Medicare Advantage plan without a monthly premium at all.

Costs are also going down for standalone Part D plans, though it’s worth noting that CMS only releases data for the lowest Part D premium for each state. That means Plan D pricing might be higher where you live and you may or may not have access to the lowest Part D premiums.

Nationwide, the average lowest premium for Part D in 2022 is $7.03 a month, a 14-cent drop over last year. And nearly everyone with Part D (99.8%) will have access to a plan that costs less than what they had in 2021.

Some plans will offer even broader benefits.

Over the last few years, Medicare Advantage plans have added more benefits to their lineup, thanks in part to competition from other plans and in part because federal regulations have allowed them to.

Advantage plans have always been able to offer broader benefits, but in recent years, the government has given the green light to add benefits you might not expect under a health insurance policy.

These benefits are designed for people who are considered to be chronically ill, and they include things like pest control services, structural home modifications, non-medical transportation and other things that aren’t strictly medical but could be helpful in improving quality of life.

Most Medicare Advantage plans do not offer these types of benefits, but more do in 2022 than they did last year. In 2021, an average of 10 plans per state offered innovative supplemental benefits. Next year, that average jumps to 21.

Even the best plans change.

Lower costs and more plans with broader benefits are two great reasons to look for coverage during open enrollment, but the biggest reason is because your own plan might change from year to year. If you like your coverage and it doesn’t change, then there’s no reason to make a switch.

But make sure that’s the case before enrollment ends.

Your health plan should send you an Annual Notice of Change (ANOC) each fall outlining any changes for the coming year. Take the time to look it over and note any updates, like premium increases or coverage changes.

And if you haven’t already, now’s the time to sit down and take stock of your coverage options for 2022. The enrollment window closes on December 7th. Make sure you’ve got what you need in place for next year.