Updated October 20th, 2023
10,000 American seniors turn 65 every day, and all living Baby Boomers will be at least 65 by the year 2030.
Over 66 million Americans – mostly age 65 and older – are enrolled in Medicare.
Original Medicare (Parts A and B) is administered by the federal government and is available to qualified beneficiaries in all states. Private Medicare insurance plans such as Part C and Part D plans are offered by insurance companies and – unlike Original Medicare – are offered in limited areas. A Medicare beneficiary can only enroll in a private Medicare plan if it’s offered in their ZIP code.
Over 30.8 million Medicare beneficiaries (over half of all Medicare enrollees) are enrolled in a type of private Medicare plan called a Medicare Advantage plan. Another 18.7 million are enrolled in a stand-alone Medicare prescription drug plan (PDP).
- Medicare Advantage Prescription Drug Plans (MAPDs)
Also known as Medicare Part C, Medicare Advantage plans are sold by private insurance companies and replace a beneficiary’s government-provided Original Medicare coverage.
Medicare Advantage plans offer all the same benefits of Original Medicare, and many plans may offer additional benefits that Original Medicare doesn’t cover, such as prescription drug coverage. In 2023, 89% of all Medicare Advantage plans included prescription drug coverage.
- Medicare Part D Prescription Drug Plans (PDPs)
Also known as Medicare Part D, these plans provide coverage exclusively for retail prescription drugs, which aren’t typically covered by federally-provided Original Medicare (Medicare Parts A and B).
Private Medicare insurance can vary greatly from one state — or even one county or zip code — to the next. Some seniors may live in an area where numerous affordable and high-quality plan options are offered, while others may live in an area with a number of high cost plans and scarce selection.
Best States for Medicare: Overview
In this report, we determine where Medicare beneficiaries have access to the widest range of quality private Medicare plans at the most affordable prices. To do this, we compared plan data from the Centers for Medicare & Medicaid Services (CMS) for the 50 states, using two primary factors:
We factored the average premium and the average annual medical deductible.
We highlighted the percentage of plans that are ranked four stars or higher based on the Medicare Star Rating system. All Medicare Advantage plans and Medicare Part D drug plans are assigned an annual star rating by the Centers for Medicare & Medicaid Services (CMS). One-star plans are determined to be lowest quality, and plans rated four stars or higher are considered “highly-rated” plans.
Read on for our findings and for insight on the future of Medicare in America from two licensed insurance agents.
2024 National Average Medicare Premiums, Deductibles and Quality
|Type of Plan||Average Premium||Average Medical Deductible||Average In-Network Out-of-Pocket Spending Limit||Average % of Plans Rated 4 Stars or Higher|
|Medicare Advantage Prescription Drug Plan (MA-PD)||$14.14||$91.17||$5,513.24||56.4% of plans in each state, on average|
The average 2024 MAPD premium is $14.14 per month, though many areas may offer plans that feature $0 monthly premiums. The average deductible for the medical coverage offered by MAPD plans is $91.17 for the year, partly due to the number of plans that feature $0 medical deductibles.
The average in-network maximum out-of-pocket spending limit (MOOP) in 2024 is $5,513.24 for MAPD plans. No Medicare Advantage plan can have an out-of-pocket spending limit higher than $8,850 in 2024, according to CMS.
Regarding plan quality, an average of roughly 56% of available Medicare Advantage Prescription Drug plans available in each state are rated 4 out of 5 stars or higher by Medicare in 2024.
Best States for Medicare: 2024 Average Medicare Costs by State
|State||Average Monthly Medicare Advantage Prescription Drug Plan Premium||Average Medical Deductible||Average In-Network Out-of-Pocket Spending Limit||Percent of Plans Rated 4 Stars or Higher|
Factors in Medicare Advantage Premiums
The national average cost of a Medicare Advantage Prescription Drug plan in 2024 is $14.14 per month. But as you can see from the table above, the cost of an MA-PD plan can vary quite dramatically by location.
- In Michigan, Wyoming, North Dakota, Montana and Minnesota, average Medicare Advantage premium rates are $38 or more per month in 2024.
- In Texas, Louisiana, Florida and Nevada, the average premium is less than $7 per month.
Some of the factors that can influence a state’s average premium is the local cost of living, competition among insurance carriers, supplemental benefits that are offered by the plan and the quality of the plan’s coverage.
While the average medical deductible for an MA-PD plan is $91.17, North Dakota, New Hampshire, Montana, Vermont, Minnesota and Massachusetts have average annual medical deductibles of $200 or higher.
Medicare Advantage Plan Quality by State
Every year, the Centers for Medicare & Medicaid Services rates all Medicare Advantage plans according to a five-star scale based on various quality metrics. Three stars represents a plan of average quality, while four stars is considered above average and five stars is excellent.
The metrics used in scoring a plan include:
- Preventive care and improvements in member health
- Chronic condition management
- Member satisfaction
- Member complaints and turnover
- Customer service
On average, 56% of Medicare Advantage Prescription Drug plans in each state earned either a 4 out of 5-star rating or higher for 2024, meaning they are highly-rated Medicare plans.
The following states have the highest average percentage of highly rated 2024 Medicare Advantage Prescription drug plans, with at least 70% of 2024 plans rated 4 stars or higher by Medicare.
- West Virginia
- South Dakota
Plan quality is lowest in Connecticut and Nevada, where fewer than one in three plans are rated 4 stars or higher in 2024.
Analysis from licensed insurance agents
As of October 15, millions of American seniors have the opportunity to purchase a private Medicare insurance plan for the first time or switch to a new coverage option during the Medicare Annual Enrollment Period (AEP). This period, also called the fall Medicare Open Enrollment period, lasts until December 7.
We asked two licensed insurance agents for their insight on what Medicare beneficiaries should keep in mind when they consider changing their Medicare plan or enrolling in a new one for the first time. Here's what they had to say.
What are the most important steps Medicare beneficiaries can take to minimize out-of-pocket health care costs and find good coverage options for their needs?
- Rebeka Etheredge, licensed insurance producer in California: First, it’s important to compare several plan options to find the right plan for your needs and your budget. While comparing plans, make sure to check if the plan accepts your current doctor and prescriptions. Second, visiting in-network doctors and pharmacies may help keep your medical and drug costs down. Finally, if you’re unsure if your Medicare plan covers a service, simply ask! It’s so important to understand each service and the cost, before you receive the treatment, so you aren’t stuck with a surprise Medicare bill.
What are some common mistakes that people make when shopping for Medicare coverage, and how can you avoid doing the same?
- Christian Worstell, licensed insurance agent in North Carolina: It's not uncommon for people to settle for the first attractive plan they see without making the extra effort to continue shopping. Many people may have access to dozens of plans, but don't take the time to review them all.
I always advise consumers to make a short list of the plans that suit them the best and carefully narrow their choices as they go. You're signing up for a year's worth of coverage, so it's worth the extra time to get it right.
- Etheredge: One common mistake Medicare beneficiaries make is remaining in the same plan, year after year, without checking out other plan options. Medicare Advantage and Medicare prescription drug plans might change from year to year. It’s important to know if your current plan is changing or if there’s another option out there that’s a better fit for your needs and budget.
What should Medicare beneficiaries do to prepare for the coming new year?
- Worstell: Review your previous year. What type of health care did you utilize? Where did you spend the most money? What types of health conditions do you have or have been warned about by your doctor? It's nearly impossible to predict our health. But the more you can anticipate your future health care needs, the better you can align those needs with your upcoming benefits.
- Etheredge: If you are enrolled in a Medicare plan, you should review your Plan Annual Notice of Change (ANOC) every year. Your insurance provider will mail this to you each fall. This document explains any plan changes, such as changes to the benefits, costs or service areas.
Is Medicare different in each state?
Medicare coverage will be the same from state to state, though costs and slight differences may exist.
This article used data provided by the Centers for Medicare & Medicaid Services (CMS). The 2024 MA Landscape Source Files as well as carrier-provided plan data provided by Sun Fire Inc. were used for analysis.
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