The average Medicare beneficiary has a choice of 43 Medicare Advantage (MA) plans and 24 Part D stand-alone plans for coverage in 2023, the Kaiser Family Foundation (KFF) finds. But another study by the American Medical Association (AMA) notes that top payers dominate the market, and the lack of competition may spell trouble for enrollees.

Medicare beneficiaries have even more choices in the MA marketplace for 2023, according to a new KFF analysis. A typical beneficiary has a choice of 43 MA plans as an alternative to traditional Medicare, an increase of five plans on average from 2022.

Furthermore, a second KFF study finds that a typical beneficiary has a choice of 24 Medicare Part D stand-alone prescription drug plans for 2023, one more than in 2022.

The two KFF briefs also provide an overview of the MA and Medicare Part D marketplace for 2023, including the latest data and key trends that have emerged during Medicare’s open enrollment period.

MA marketplace for 2023

 More than 28 million Medicare beneficiaries–48 percent of all eligible beneficiaries–are enrolled in MA plans, which are mostly HMOs and PPOs offered by private insurers. Enrollment is projected to cross the 50 percent threshold as soon as next year.

For 2023, KFF finds that a typical beneficiary has 43 MA plans to choose from in their local market, including 35 plans that offer Part D drug coverage. In total, 3,998 MA plans will be available across the country.

Two thirds (66 percent) of MA plans do not charge an additional premium beyond Medicare’s standard Part B premium, up from 59 percent in 2022. In 2023, nearly all plans (97 percent or more) offer some vision, fitness, telehealth, hearing, or dental benefits, though the scope of coverage for these services varies.

The average Medicare beneficiary can choose from plans offered by nine organizations in 2023, the same number as in 2022. Even so, MA enrollment is concentrated in plans operated by UnitedHealthcare and Humana, which together account for 46 percent of MA enrollment in 2022. Indeed, an American Medical Association study of competition in health insurance markets found sparce competition in the MA space. That study looks at MA markets in 380 metropolitan statistical areas (MSAs) and presents the two largest insurers' market shares and market concentration levels as measures of competition. Nearly four out of five (79 percent) MSAs had MA markets with low levels of competition.

“High levels of market concentration can result in diminished competitive constraints on insurers,” AMA President Jack Resneck, Jr., M.D., said in a study announcement.  “Unchecked market power among insurers is a formula for higher premiums, lower coverage, and inadequate levels of patient care, concerns of great relevance to Medicare Advantage.”

The AMA study found:

  • Thirty-four percent of MSA-level markets had one insurer with a share of 50 percent or more. Six percent of MSA-level markets had one insurer with a share of 70 percent or more.
  • The 10 states with the least competitive MA markets are Vermont, North Dakota, Wyoming, Montana, Rhode Island, South Dakota, West Virginia, District of Columbia, Nebraska, and Louisiana.
  • The 10 largest health insurers in the U.S. at the national-level by market share were: UnitedHealth Group (28 percent), Humana (19 percent), CVS Health-owner of Aetna (11 percent), Kaiser Permanente (7 percent), Elevance Health formerly Anthem (6 percent), Centene (4 percent), Cigna (2 percent), Blue Cross Blue Shield of Michigan (2 percent), 9. Highmark (1 percent), SCAN Health Plan (1 percent).

Part D marketplace for 2023

The total number of Medicare Part D stand-alone prescription drug plans that will be offered in 2023 will increase by five percent to 801 plans. Fifteen organizations offer the plans, the lowest number in any year since Part D started.

The estimated average monthly premium for Medicare Part D stand-alone drug plans is projected to be $43 in 2023, based on current enrollment, a 10 percent increase from $39 in 2022. This rate of increase outpaces both inflation and the Social Security cost-of-living adjustment for 2023. In the stand-alone drug plan market, more than eight out of 10 enrollees next year are projected to be in stand-alone plans operated by just four firms: CVS Health, Centene, UnitedHealth, and Humana.

Average monthly premiums for the 16 national stand-alone drug plans available in 2023 are projected to range from $6 to $111. Premiums are rising for 12 of the 16 plans, including four plans with increases exceeding $10.

Marketplace changes due to Inflation Reduction Act
Beginning in 2023, under a provision in the Inflation Reduction Act (IRA), Part D enrollees will pay no more than $35 per month for covered insulin products in all Part D plans and will pay no cost sharing for adult vaccines covered under Part D. Also, beginning in 2023, drug manufacturers will be required to pay rebates for drug prices that rise faster than the rate of inflation, which could help to dampen cost increases for Part D enrollees.

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The new law also caps enrollees’ out-of-pocket drug spending under Part D, as of 2024, and requires Medicare to negotiate prices for some drugs, with negotiated prices first available for some Part D drugs in 2026.