Skip to main content

Why This Year Is Different: Compare Medicare Advantage and Medicare Part D Plans

There are more Medicare Advantage plans than ever in 2022, so take the time to compare—it could save you plenty of money and net you greater benefits.

A record number of Medicare Advantage plans will be available across the country as alternatives to traditional Medicare for 2022, according to a new Kaiser Family Foundation analysis.

That represents an 8% from 2021, and the largest number of plans available in more than a decade, according to KFF.

At the same time, KFF reports that the number of Medicare Part D stand-alone prescription drug plans that will be offered in 2022 is decreasing by 23% to 766 plans, primarily the result of firm consolidations leading to fewer plan offerings sponsored by Cigna and Centene, according to another KFF analysis.

Here’s a look at some of the changes, according to KFF.

Medicare Advantage

More than 26 million Medicare beneficiaries – 42% of all beneficiaries – are currently in Medicare Advantage plans, which are mostly HMOs and PPOs offered by private insurers that are paid to provide Medicare benefits to enrollees.

In 2022, a typical beneficiary will have 39 plans to choose from in their local market. But the number of Medicare Advantage plans available varies greatly across the country, with an average of 42 plans in metropolitan areas and 25 plans in non-metropolitan areas. In 2022, 25% of beneficiaries live in a county where they can choose among 50 Medicare Advantage plans.

For his part, Thomas Wright, the president of The Turning 65 Workshop, said the “sheer number of Medicare Advantage options leads to lots of confusion and makes it very difficult for the average person effectively ‘shop’ for coverage.”

Most Medicare Advantage plans (89%) include prescription drug coverage, according to KFF. Of these, 59% do not charge any additional premium beyond Medicare’s standard Part B premium. More than 90% of non-group Medicare Advantage plans offer some vision, telehealth, hearing, or dental benefits.

According to Jae Oh, author of Maximize Your Medicare, part of the appeal to Medicare Advantage plans is the cost as well as the convenience of having prescription drugs covered at a cost lower than if you had a standalone Part D prescription plan and original Medicare.

Despite the average beneficiary having access to plans offered by nine different firms, Medicare Advantage enrollment is concentrated in plans operated by UnitedHealth  (UNH) - Get Free Report, Humana  (HUM) - Get Free Report, and Blue Cross Blue Shield affiliates. Together, UnitedHealth and Humana account for 45% of Medicare Advantage enrollment in 2021.

One potential downside to Medicare Advantage plans is that its annual contract and the features change each year. 

“That's not necessarily negative because this can mean extra add-ons, extra benefits, extra access to supplementary benefits that can be very important to the policy owner,” said Oh. “Nevertheless, it does make the fact that changing is not comfortable to many. And, in addition to that, the ability to compare is becoming more and more complicated. Unfortunately, that trend I don't believe to be stopping anytime soon.”

Part D

As a result of consolidations in the stand-alone drug plan market, the typical Medicare beneficiary will have a choice of 23 stand-alone drug plans next year, seven fewer than in 2021, according to KFF. Beneficiaries receiving low-income subsidies (LIS) will also have fewer premium-free plan choices in 2022, which could make it more difficult for some enrollees to find a premium-free plan that covers all their prescription medications.

“It has made things a little bit more challenging going into 2022,” said Oh. “If someone is now looking to evaluate which plan to choose for 2022 it's obvious if you were on original Medicare and you need to choose a part D plan, that task has become a little bit tougher.”

In the stand-alone drug plan market, KFF reports that eight out of 10 enrollees next year are projected to be in stand-alone plans operated by just four firms: CVS Health  (CVS) - Get Free Report, Centene  (CNC) - Get Free Report, UnitedHealth, and Humana.

The estimated average monthly premium for Medicare Part D stand-alone drug plans is projected to be $43 in 2022, based on current enrollment, while average monthly premiums for the 16 national stand-alone drug plans available in 2022 are projected to range from $7 to $99.

According to Oh, beneficiaries who face fewer Part D options may decide to switch from original Medicare to a Medicare Advantage prescription drug plan for cost reasons.

Nearly three-fourths, or 10 million, of the 13.3 million stand-alone drug plan enrollees who don’t qualify for low-income subsidies will have to pay higher premiums next year if they stick with their current plan, and many will also face higher deductibles and cost-sharing for covered drugs, reports KFF.

While the average weighted monthly PDP premium is increasing by $5 between 2021 and 2022 (from $38 to $43), nearly 4 million non-LIS enrollees (28%) will see a premium increase of $10 or more a month, according to KFF. Substantially fewer non-LIS enrollees (0.2 million, or 2%) will see a premium reduction of the same magnitude.

“The biggest concern I hear for Part D prescription coverage remains the potential for crippling out-of-pocket costs,” said Wright. “My latest understanding is that a provision for a $2,000 annual out-of-pocket cap is still alive within the pending Build Back Better bill. For individual enrollees, this would be hugely consequential...far greater than any market consolidation concerns.”

Keys to a Better Retirement – Here's What the Experts Say

It's Difficult, But Be Sure to Compare

A recent KFF analysis found that seven in 10 Medicare beneficiaries say they did not compare their options during a recent open enrollment period.

To be sure, comparing and choosing among the wide array of Part D plans can be difficult, given that plans differ from each other in multiple ways, beyond premiums, including cost-sharing, deductibles, covered drugs, and pharmacy networks, KFF wrote.

And comparing Medicare Advantage drug plans may be made more difficult by the fact that not only drug coverage varies but also other features, including cost-sharing for medical benefits, provider networks, and coverage and costs for supplemental benefits, KFF noted.

But it’s critical that beneficiaries compare their options to avoid costly mistakes. “It is complicated, but it is worth it,” said Oh. “The difference in overall financial costs is multiple hundreds of dollars a year, if not more.”

Frequently Asked Questions

KFF has also updated its collection of frequently asked questions about Medicare Open Enrollment, which runs through Dec. 7, to help beneficiaries understand their options during the annual open enrollment period.