Medicare Advantage plans are becoming more attractive than traditional Medicare, according to Avalere analysis of recently released annual Centers for Medicare and Medicaid Services data on plan participation, beneficiary premiums, and benefit designs.
The percentage of beneficiaries with access to a zero-premium Medicare Advantage plan increased from 78 to 81 percent from 2015 to 2016, according to Avalere. The zero-premium MA plans were newly available in 102 counties in 2016.
Because zero-premium plans can only be offered by plans that bid sufficiently below the fee-for-service benchmark, this trend reflects the success of Medicare Advantage plans in competing with fee-for-service Medicare, Avalere said.
[Also: Medicare Advantage premiums remain stable in 2017, CMS says]
Part D beneficiaries continue to have multiple plan options available, but the number of prescription drug plans have dropped 11.5 percent since 2015, to 886 in 2016, Avalere said. This is the lowest amount since the inception of the Part D program.
Avalere looked at how key trends in the 2017 Part D and Medicare Advantage programs will likely influence the 2017 market.
"The number of enhanced Part D plans decreased considerably in 2016," said Kelly Brantley, vice president at Avalere. "Looking ahead, it will be important to analyze trends for enhanced PDPs (prescription drug plans) and assess the potential impact these differences may have on patients."
Other analysis of the CMS data shows maximum out-of-pocket limits for MA plans have risen from 2013 to 2016.
In 2013, 58 percent of MA plans had an out-of-pocket limit of under $4,000, compared to 30 percent in 2016.
[Also: Medicare Advantage consumers loyal to MA, but not to insurer, study finds]
This trend may be an effort by plans to offset reductions in reimbursement while maintaining a zero premium, Avalere said.
The number of provider-sponsored MA plans has increased.
In 2016, providers represented 58 percent of new MA organizations entering the program for a total, 70 provider-sponsored organizations offering 403 Medicare Advantage plans in 41 states.
Enhanced Part D Plans offer basic and enhanced plans. Enhanced plans offer additional benefits beyond what is required, typically at a higher premium.
However, Part D beneficiaries who receive low-income subsidies may only receive full premium subsidies if enrolled in certain basic plans.
In 2016, the number of enhanced standalone Part D plans slightly exceeded the number of basic prescription drug plans.
The growing division of low income subsidy and non-low income subsidy enrollment into different plan types has raised concerns among policymakers about potentially diminished access for low-income beneficiaries, Avalere said.
Despite growing Part D spending, CMS anticipates premiums in the program will increase only slightly in 2017. Some plans may increase premiums, while others may change benefit design by increasing deductibles to account for underlying costs.
Twitter: @SusanJMorse