So, why is this the case, and what can we learn from it?

First and foremost, it is important to understand that a $0 premium does not mean that a plan does not cost anything – co-pays, deductibles, and more still exist.

Medicare Advantage plans cover:

• Traditional Medicare Services
• Benefits like dental, vision, prescription drug coverage
• Supplemental benefits like transportation, meal services, in-home care, and fitness programs

The cost of these extra benefits can be incorporated into the plan’s overall monthly premium or provide discounts to like-services. For many Medicare Advantage members, especially low utilizers, the appeal of a $0 premium is simply that they will not have to pay anything upfront or monthly recurring fees.

However, for the 27% of MA enrollees who do choose plans with a premium:

• The average monthly cost ranges from <$20 to $300+ per month, and an average of $62
• The average monthly premium is down -2% YoY
• Nearly 50% of the members that pay a premium, pay between $20-$50 per month

For these members, the extra benefits, specific services, or health needs offered by the plan may be worth the monthly premium. In fact, when a premium exists, the higher the monthly amount, the higher the average Star Rating of the plan, indicating members are willing to pay for a higher quality, more comprehensive experience, and plans are more engaging when charging a premium.