Medicare Advantage is a private Medicare option in which insurance companies approved by the government provide coverage to seniors in lieu of the traditional fee-for-service (FFS) Medicare.

Avalere experts offer the following observations on key trends in the MA and Part D programs that are likely to influence the 2018 market.

Data from Landscape Files from previous years suggest the following trends:

MA Market

• Most beneficiaries continue to have access to plans that would require no monthly premiums, which helps attract new beneficiaries and those currently in traditional FFS
• Fewer beneficiaries have access to a plan with an out-of-pocket limit below $4,000
• Providers will continue to enter the plan market as accountable care organizations (ACOs) and other advanced provider organizations become more comfortable with managing financial risk

Part D Market

• In recent years, the number of enhanced standalone Prescription Drug Plans (PDPs) slightly exceeded the number of basic standalone PDPs, raising questions among policymakers about whether basic PDPs offer appropriate access for low-income beneficiaries
• Part D premiums will decrease slightly in 2018, likely resulting from higher-than-predicted rebates, although beneficiaries should be aware that premiums and benefit designs can change considerably from year to year
• Beneficiaries continue to have multiple Part D plan options available

“While Part D premiums are decreasing on average, it is important to take note that this shift is not reflective of total spending in the Part D market,” said Kelly Brantley, vice president at Avalere. “Recently, we have seen some consumers experience affordability concerns partially attributable to rising reinsurance costs. If the trend continues over time, we may expect policy action on this front.”