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Medicare Advantage 2016

Happy Medicare Advantage patientOriginal Medicare isn’t for everyone. Medicare Advantage Plans cover the same benefits as Original Medicare (Medicare Part A and Part B), but may also offer additional coverage. These plans are offered by private health insurance companies and approved by Medicare. In 2016, most Medicare beneficiaries were covered by Original Medicare, with 31% of people covered by a Medicare Advantage plan, according to The Henry J. Kaiser Family Foundation.

Since private insurance companies sell the plans, you can expect your Medicare Advantage plan to change from year to year. However, all plans have different yearly changes, since Medicare Advantage plans vary from state to state and insurance company to insurance company. That being said, there have been some trends in changes made to Medicare Advantage Plans in 2016.

Here are some of the major trends and changes that were seen in Medicare Advantage in 2016, with information from The Henry J. Kaiser Family Foundation’s Medicare Advantage Fact Sheet.

Looking for 2017 Medicare Advantage information? Click here!

Cost of Medicare Advantage Plans in 2016 

The changes people are most interested in are typically changes to the cost of their plans. We’re going to take a look at the cost of Medicare Advantage plans in 2016 so that you can see how the average plan’s pricing changed.

Premium similar to that of the last five years

The average Medicare Advantage Prescription Drug plan premium in 2016 is $37 per month. This is similar to the average premium cost over the last five years, so there were no big changes to Medicare Advantage Prescription Drug premiums this year.

On average, the Medicare Advantage Prescription Drug premium actually decreased by 1% from 2015 to 2016 ($38 to $37). In 2010, these same premiums averaged to a surprising $44, so Medicare Advantage Prescription Drug enrollees are generally better off than they were six years ago when it comes to their premium.

Out-of-pocket limits

All Medicare Advantage plans have out-of-pocket limits that limit your out-of-pocket spending for services covered by Original Medicare (Medicare Part A and Part B). Though all plans have been required to provide a maximum out-of-pocket limit of $6,700, many offer lower ones. Out-of-pocket limits for Medicare Advantage plans can range from $0 to $6,700.

Unfortunately, average Medicare Advantage plan out-of-pocket limits have increased every year in recent years, with a large jump in 2014. The average out-of-pocket limit for Medicare Advantage enrollees in 2016 is $5,223. This is about 3.6% higher than the average limit in 2015, which was $5,041. In 2010, the average out-of-pocket limit was a relatively low $4,313.

Standard Medicare Part D deductible changes

In 2016, 87% of Medicare Advantage plans offer prescription drug coverage. Medicare Advantage plans are typically required to offer at least one plan that features benefits that are equal in value or provide better benefits than Medicare Part D. Because of this, these plans’ costs are affected by the Medicare Part D Standard Benefit Plan.

The Medicare Part D standard benefit plan saw some increases in costs in 2016, which means you may also have seen increases in your Medicare Advantage prescription drug coverage plan. Here are some of those changes:

  • The initial deductible was raised by $40, from $320 in 2015 to $360 in 2016.
  • The initial coverage limit was raised by $350, from $2,960 in 2015 to $3,310 in 2016.
  • The out-of-pocket threshold for standard benefit plans increased by $150, from $4,700 in 2015 to $4,850 in 2016.

Which Type of Medicare Advantage Plans People Purchased in 2016 

When it comes to choosing Medicare Advantage plans, you have a lot of options. Not only can you choose plans with different benefits, at different prices and from different insurance companies, but there are also several different Medicare Advantage plan types.

In 2016, 64% of those enrolled in a Medicare Advantage plan had an HMO (Health Maintenance Organization) plan. These plans often cost less than PPO plans, but also require beneficiaries to choose from a list of doctors, hospitals, and other providers in order to receive benefits.

30% of those with Medicare Advantage plans were enrolled in a PPO (Preferred Provider Organization) plan. These plans provide you with a list of network providers, but allow you to see any doctor you choose. You can keep costs low by seeing providers in your plan’s network.

Only 1% of Medicare Advantage enrollees had a PFFS (Private Fee-for-Service) plan in 2016. PFFS plans allow you to see any provider you want as long as they accept your PFFS plan.

4% of Medicare Advantage enrollees had another type of plan.

How to Change Medicare Advantage Plans 

If your Medicare Advantage plan is no longer meeting your health care needs or you are paying more than you want to in 2016, you should consider changing plans. Generally, the only time you can switch Medicare Advantage plans is during the Medicare Open Enrollment Period, which occurs from October 15 to December 7 every year.

If you would like to leave Medicare Advantage and switch back to Original Medicare, you can do so during the Medicare Advantage Disenrollment Period. This period occurs from January 1 to February 14 every year. If your Medicare Advantage plan included prescription drug coverage, you can enroll in a Medicare Part D plan during Special Election Period (January 1 to February 14).

When switching Medicare Advantage plans, you will want to consider the following factors:

  • Plan ratings
  • Availability of healthcare providers
  • Costs, including premiums, deductibles, copayments, and maximum out-of-pocket limits
  • Prescription drug coverage
  • Travel coverage

To learn more about Medicare Advantage in general, visit our About Medicare Advantage Plans  page. This page goes into more detail about what Medicare Advantage Plans are, what they cover, and who is eligible.


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