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Do Medicare Advantage Premiums Increase With Age?

September 14, 20237 min read

Over 28 million Medicare beneficiaries are enrolled in Medicare Advantage Plans for their health coverage in 2023. Medicare Advantage offers an alternative way to receive your Medicare benefits through private insurance companies. One key question when evaluating plan options and costs is whether Medicare Advantage premiums increase as you get older.

Understanding how age can impact your Medicare Advantage monthly premiums allows you to better estimate your costs each year. We’ll examine the factors that go into Medicare Advantage Plan pricing and how premiums may change as you age.

How Medicare Advantage Premiums Are Set

First, it’s helpful to understand how Medicare Advantage Plans determine the premiums they charge each member.

·        Private insurers submit plan designs and proposed premiums to Medicare annually.

·        Premiums are based on your current age. projected medical costs, administrative expenses, and profit margin.

·        Medicare reviews to ensure premiums are competitive and reasonable.

·        Plans with lower premiums may attract higher enrollment.

Once approved, the premium for each Medicare Advantage Plan is set for the calendar year ahead.

Do Premiums Rise As You Age?

For 2023, about half of Medicare Advantage Plan enrollees are in a $0 premium plan. The other half have monthly premiums averaging $19 across all plan types.

But can premiums rise as you grow older even if you remain in the same Medicare Advantage Plan?

The short answer is no. As long as you stay enrolled in the same Medicare Advantage Plan year after year, your monthly premium will remain the same or may even decrease. It will not increase with age.

However, the plan premium paid by new members eligible for Medicare may be higher than the premium you currently pay for the same plan. We’ll explain why next.

Why Age Impacts Plan Premiums

When you first enroll in a Medicare Advantage Plan, the premium is based on your age at that time. Medicare Advantage Plan premiums for new members are typically higher for those enrolling at older ages.

For example, let’s say you enroll in an HMO Medicare Advantage Plan at age 65 in 2023. Your monthly premium is $45.

Another person enrolls in the very same HMO plan at age 75 in 2028. Due to being older, their monthly premium may be $65 for that same plan.

So while any yearly premium changes impact members of all ages equally, new members joining at older ages often have higher plan premiums set based on their age.

What Drives Premiums Up With Age?

There are a few key reasons why Medicare Advantage premiums rise for new enrollees as they get older:

·        Older beneficiaries tend to have more health issues and higher medical costs, impacting pricing.

·        Plan designs limit out-of-pocket costs more for older retirees.

·        Older enrollees expect more supplemental benefits like dental and vision.

·        Administrative costs are higher for older beneficiaries.

As a result, Medicare Advantage Plans charge appropriately higher premiums to new members enrolling at older ages to cover greater costs.

Examples of Premium Increases With Age

To illustrate how monthly premiums for new Medicare Advantage members rise with age, here are some examples:

·        A UnitedHealthcare AARP Medicare Advantage Plan may charge $19/month for a 65 year old but $39/month when joining at age 75.

·        A Humana HMO may charge a new 69 year old $0/month yet have a $29/month for the same plan at age 78.

·        A Blue Cross Medicare Advantage Plan may increase from $45/month at 65 years to $89/month at 75 years old.

While each insurer prices differently based on specific benefits and costs in their area, the pattern of higher monthly premiums for those joining at older ages generally remains consistent.

Will My Premiums Go Up Each Year?

While insurers can’t increase your Medicare Advantage premium solely because of your age, the plan may raise the premiums annually at a modest rate:

·        Premium increases must be approved by Medicare as actuarially justified.

·        Average premium has risen just $7 over the past decade - from $12 in 2010 to $19 in 2023.

·        Premium hikes are limited for existing enrollees. Much larger for new members.

·        Premiums are more likely to decrease or stay the same year-to-year.

So while new members pay more at older enrollment ages, existing members receive price protection in their Medicare Advantage Plan from drastic premium jumps.

How Do Medigap Plans Compare?

One key difference versus Medigap supplemental coverage is that Medigap Plan monthly premiums also rise as you age when newly enrolling:

·        Medigap insurers can base pricing on your age when newly joining a plan.

·        They typically use “attained age rating” where premiums increase 5-15% with each year of age at enrollment.

·        Premiums will rise annually on your Medigap policy based on your age bracket.

So both Medicare Advantage Plans and Medigap policies cost more at older ages when initially signing up. But Medicare Advantage provides stronger guardrails against significant yearly increases.

Key Takeaways on Medicare Advantage Premiums and Age

In summary, reviewing how Medicare Advantage premiums correlate with age:

·        Premiums for new members are higher when first enrolling at older ages.

·        Once in a plan, your premiums remain stable and won’t increase with your age.

·        Modest premium increases may occur annually but are limited.

·        Medigap supplemental plans also cost more at older ages when newly enrolling.

While costs are higher for those joining Medicare Advantage at an older age, you’ll have premium stability and protection from large increases as you age once enrolled in a plan you like.

We’re Here to Help

You do not have to spend hours reading articles on the internet to get answers to your Medicare questions. Give the licensed insurance agents at Bourgeois Insurance a Call at (985) 803-8999. You will get the answers you seek in a matter of minutes, with no pressure and no sales pitch. We are truly here to help.

FAQS

What is the monthly premium for Medicare Part B?

The standard Medicare Part B premium for 2023 is $164.90 per month for most beneficiaries. Higher income seniors pay more. The premium helps cover costs for medical services covered under Part B.

How much do Medigap supplemental plans cost?

 Medigap premiums vary by plan, benefits, and insurance company. Premiums are also based on your age when you enroll. Older enrollees generally pay higher premiums. A licensed agent can help find plans.

 Do all Medicare Advantage Plans have a $0 premium?

 No. Some Medicare Advantage Plans charge a monthly premium in addition to the Medicare Part B premium. Average premiums are around $20 per month, but premiums may be higher depending on the plan you choose.

What other out-of-pocket costs are there with Original Medicare?

 With Original Medicare you pay a Part A deductible for hospital stays, Part B deductible for medical services, and 20% coinsurance for most covered services. These costs are not capped.

Are prescription drugs covered under Medicare Part A and Part B?

 No. You need to enroll in a separate Medicare Plan Part D prescription drug plan to get medication coverage with Original Medicare. Premiums for Part D Plans vary by plan.

 Can I switch from a Medicare Advantage Plan back to Original Medicare?

Yes, you can switch from a Medicare Advantage Plan back to Original Medicare during Medicare's open enrollment period each year. You may have to pay a higher Medigap premium though based on your age.

 How much does Medicare Part A coverage cost?

 Most people don't pay a premium for Medicare Part A. This is because they paid Medicare taxes while working. Part A has a deductible of $1,600 in 2023 for each benefit period.

What extra benefits do some Medicare Advantage Plans cover?

 Many Medicare Advantage Plans offer dental, vision, hearing, transportation, gym memberships and other extra benefits not covered by Original Medicare. These benefits vary by plan.

 Are Medicare Supplement and Medicare Advantage Plans both offered by private insurers?

Yes. Medigap Plans are sold by private insurance companies to supplement Original Medicare costs. Medicare Advantage Plans are also offered by private insurers as an alternative to Original Medicare insurance plan.

 Where can I learn more about Medicare costs and coverage?

Visit Medicare.gov to review costs, coverage details, plan options and enrollment information. You can also contact your State Health Insurance Assistance Program (SHIP) for personalized Medicare help.

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