11 Worst States for Medicare Drug Plan Menu Cuts

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The Medicare Advantage plan and Medicare Part D prescription drug plan annual enrollment period is set to start Oct. 15.

Agents and brokers are about to find out whether the upcoming enrollment will just be a little rocky, due to government subsidy cuts, marketing rule changes and Medicare drug plan benefits design changes, or so chaotic it will affect the general elections and any conversations about insurance and financial services administration and marketing that go on in Washington.

Many members of the Senate and House are already old enough to be using Medicare, and they all hear regularly about problems with the program. That means anyone who is trying to shape financial services policy or trying to shape federal financial services policy has a stake in Medicare program performance.

One simple indicator is the number of Medicare drug plans willing to work with agents and brokers.

The United States has about 3,102 counties, parishes and similar types of jurisdictions.

CMS presents plan counts at the county level.

The producer compensation spreadsheets show that the average number of county-level drug plan entries offering compensation for agents and brokers will fall 25% in 2025, to 49,992, or 16 plans per county, from 21 plans per county this year.

The average number of compensation-paying plans available per county will range from 12, in Alaska, Hawaii and New York, up to 18, in California.

For a look at where the number of compensation-paying plans is on track to fall the most in 2025, see the gallery above. (There are many ties.)

For data on all 50 states and some other state-like regions, see the table below.

What it means: Our analysis suggests that the main change this year will be a sharp drop in the number of drug plans available and, possibly, changes in plan benefits and parameters that don’t show up in the big summary spreadsheets.

Prices could be significantly higher for stand-alone Medicare drug plans but still less than $100 per month.

For enrollees with serious health problems, the Medicare drug plans that are still available could be a better value, because new Inflation Reduction Act changes will cap the member maximum out-of-pocket spending limit for covered drugs at $2,000. In the past, enrollees taking expense drugs could face much higher out-of-pocket spending totals.

The data: The Centers for Medicare and Medicaid Services shows data on premiums at all Medicare Advantage and Medicare drug plans in giant spreadsheets here and data on the minimum and maximum amounts that plans pay agents and brokers in spreadsheets here.

What happened: Our analysis of the plan premium spreadsheets indicates that number of Medicare Advantage county-level plan listings will fall just 5.1%, to 91,202. In a typical state, the average monthly premium will hold steady at about $20 and the average maximum out-of-pocket spending cap will increase by about 5.7%, to about $5,900 per year.

For drug plans, the typical state’s average monthly premium will increase about 23%, to $75 per month, and the state’s average deductible will fall 4.7%, to decrease $360 per year.

At a typical drug plan that works with agents and brokers, the typical initial commission will be $109, up from $100.

Methods: We came up with premium figures by filtering the plan premium spreadsheet for plans that are health maintenance organization plans or preferred provider organization plans, not special needs plans, fee-for-service plans or unusual types of plans.

For plans available in all counties in a state, we multiplied figures by the number of counties. We did not try to weight for county population or enrollment per county.

We then created county-level premium and deductible average for each state.

For the prescription drug plan count change figures, we used data from the Medicare agent and broker compensation files. We broke out the data for the prescription drug plans, multiplied by the number of counties served, then came up with county plan entry counts by state.

We came up with a producer compensation figure by averaging the amounts of six types of compensation: the minimum and maximum referral fees; the minimum and maximum commissions for initial policy sales; and the minimum and maximum commissions for policy renewals.

The figure is a rough indicator of how well plans pay and does not reflect how likely it is to get the minimum or maximum compensation level or the plans actual average or median compensation levels.

Credit: CMS

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