Medicare Advantage in 2022: Premiums, Out-of-Pocket Limits, Cost Sharing, Supplemental Benefits, Prior Authorization, and Star Ratings

Medicare beneficiaries have the option of receiving their Part A and Part B Medicare benefits through a private Medicare Advantage plan. The federal government contracts with private insurers to provide Medicare benefits to enrollees, and plans are required to meet federal standards. For example, Medicare Advantage plans are required to provide an out-of-pocket limit, and may provide additional benefits or reduced cost sharing compared to traditional Medicare. They are also permitted to limit provider networks, and may require prior authorization for certain services, subject to federal standards. This brief provides information about Medicare Advantage plans in 2022, including premiums, cost sharing, out-of-pocket limits, supplemental benefits, prior authorization, and star ratings, as well as trends over time. A companion analysis examine trends in Medicare Advantage enrollment.

Nearly 7 in 10 Medicare Advantage enrollees (69%) are in plans with no supplemental premium (other than the Part B premium) in 2022

In 2022, nearly 7 in 10 beneficiaries (69%) are in zero-premium individual Medicare Advantage plans with prescription drug coverage (MA-PDs), and pay no premium other than the Medicare Part B premium ($170.10 in 2022). The MA-PD premium includes both the cost of Medicare-covered Part A and Part B benefits and Part D prescription drug coverage. In 2022, 87% of Medicare Advantage enrollees in plans open for general enrollment are in plans that offer prescription drug coverage.

Altogether, including those who do not pay a premium, the average enrollment-weighted premium in 2022 is $18 per month, and averages $11 per month for just the Part D portion of covered benefits, substantially lower than the average premium of $40 for stand-alone prescription drug plan (PDP) premiums in 2022. Higher average PDP premiums compared to the MA-PD drug portion of premiums is due in part to the ability of MA-PD sponsors to use rebate dollars from Medicare payments for benefits covered under Parts A and B to lower their Part D premiums, which according to the Medicare Payment Advisory Commission (MedPAC), are $300 per enrollee annually in 2022.

For the remaining 31% of beneficiaries who are in plans with a MA-PD premium (5.7 million), the average premium is $58 per month, and averages $35 for the Part D portion of covered benefits – slightly lower than the $40 monthly PDP premium.

Premiums paid by Medicare Advantage enrollees have declined since 2015

In 2022, the average enrollment weighted MA-PD premium, including among those who do not pay a premium, is $18 per month. However, average MA-PD premiums vary by plan type, ranging from $16 per month for HMOs to $20 per month for local PPOs and $49 per month for regional PPOs. Nearly 6 in 10 Medicare Advantage enrollees are in HMOs (59%), 38% are in local PPOs, and 3% are in regional PPOs in 2022. Regional PPOs were established to provide rural beneficiaries with greater access to Medicare Advantage plans.

Average MA-PD premiums have declined from $36 per month in 2015 to $18 per month in 2022. The reduction is driven in part by the decline in premiums for local PPOs and HMOs, that account for a rising share of enrollment over this time period. Since 2015, a rising share of plans are bidding below the benchmark, which enables them to offer coverage without charging an additional premium. More plans are bidding below the benchmark partly because Medicare Advantage benchmarks relative to traditional Medicare have increased over time, and when benchmarks increase, plans are able to keep more for Part A and B services as well as for extra benefits. Further, rebates paid to plans have increased over time, and plans are allocating some of those rebate dollars to lower the part D portion of the MA-PD premium. Together, these trends contribute to greater availability of zero-premium plans, which brings down average premiums.

The average out-of-pocket limit for Medicare Advantage enrollees is $4,972 for in-network services and $9,245 for both in-network and out-of-network services (PPOs)

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Figure 3: Average Medicare Advantage Plan Out-of-Pocket Limits, Weighted by Plan Enrollment, 2022

Since 2011, federal regulation has required Medicare Advantage plans to provide an out-of-pocket limit for services covered under Parts A and B. In 2022, the out-of-pocket limit may not exceed $7,550 for in-network services and $11,300 for in-network and out-of-network services combined. These limits will increase to $8,300 for in-network services and $12,450 for in-network and out-of-network services combined in 2023. These out-of-pocket limits apply to Part A and B services only, and do not apply to Part D spending, for which there is a separate out-of-pocket threshold of $7,050 in 2022, above which enrollees pay 5% of costs. Whether a plan has only an in-network cap or a cap for in- and out-of-network services depends on the type of plan. HMOs generally only cover services provided by in-network providers, whereas PPOs also cover services delivered by out-of-network providers but charge enrollees higher cost sharing for this care. The size of Medicare Advantage provider networks for physicians and hospitals vary greatly both across counties and across plans in the same county.

In 2022, the weighted average out-of-pocket limit for Medicare Advantage enrollees is $4,972 for in-network services and $9,245 for in-network and out-of-network services combined. For enrollees in HMOs, the average out-of-pocket (in-network) limit is $4,365. Enrollees in HMOs are generally responsible for 100% of costs incurred for out-of-network care. However, HMO point of sale (POS) plans allow out-of-network care for certain services, though it typically costs more than in-network coverage. For local and regional PPO enrollees, the average out-of-pocket limit for both in-network and out-of-network services is $9,228, and $9,452, respectively.

The average out-of-pocket limit for in-network services has generally trended down from 2017, and the average in-network limit decreased from $5,091 in 2021 to $4,972 in 2022. The average combined in- and out-of-network limit for PPOs slightly increased from $9,208 in 2021 to $9,245 in 2022.

About half of all Medicare Advantage enrollees would incur higher costs than beneficiaries in traditional Medicare for a 7-day hospital stay or longer

Medicare Advantage plans have the flexibility to modify cost sharing for most services, subject to limitations. Total Medicare Advantage cost sharing for Part A and B services cannot exceed cost sharing for those services in traditional Medicare on an actuarially equivalent basis. Further, Medicare Advantage plans may not charge enrollees higher cost sharing than under traditional Medicare for certain specific services, including chemotherapy, skilled nursing facility (SNF) care, and renal dialysis services.

Medicare Advantage plans also have the flexibility to reduce cost sharing for Part A and B benefits, and may use rebate dollars to do so. According to MedPAC, in 2022, about 43 percent of rebate dollars (or $840 per enrollee anually) were used to lower cost sharing for Medicare services.

In the case of inpatient hospital stays, Medicare Advantage plans generally do not impose the Part A deductible, but often charge a daily copayment, beginning on day 1. Plans vary in the number of days they impose a daily copayment for inpatient hospital care, and the amount they charge per day. In contrast, under traditional Medicare, when beneficiaries require an inpatient hospital stay, there is a deductible of $1,556 in 2022 (for one spell of illness) with no copayments until day 60 of an inpatient stay (assuming no supplemental coverage that covers some or all of the deductible).

In 2022, virtually all Medicare Advantage enrollees (99%) would pay less than the traditional Medicare Part A hospital deductible for an inpatient stay of 3 days, and these enrollees would pay $753 on average (Figure 3). But about half of all Medicare Advantage enrollees (51%) would pay more than they would under traditional Medicare (with its $1,556 deductible) for stays of 7 or more days, with average cost sharing of $1,829, among those enrollees with costs above traditional Medicare.

Total costs in Medicare Advantage would be higher than they would be in traditional Medicare (without supplemental coverage) but not high enough to reach the average Medicare Advantage out-of-pocket limit. However, this analysis does not take into account other spending by Medicare Advantage beneficiaries during the year that may cause them to reach their maximum out-of-pocket limits.

This analysis also does not take into account the fact that a majority of people in traditional Medicare would not pay the deductible if hospitalized because they have supplemental coverage, although those with Medigap or retiree health would have the additional cost of a monthly premium. However, 5.6 million beneficiaries in traditional Medicare have no supplemental coverage and would be liable for the full Part A deductible if admitted to the hospital.

Most Medicare Advantage enrollees have access to some benefits not covered by traditional Medicare in 2022 and Special Needs Plan (SNP) enrollees have greater access to certain benefits

Medicare Advantage plans may provide extra (“supplemental”) benefits that are not available in traditional Medicare. The cost of these benefits may be covered using rebate dollars (which may include bonus payments) paid by CMS to private plans. In recent years, the rebate portion of federal payments to Medicare Advantage plans has risen rapidly, totaling $432 per enrollee annually for non-Medicare supplemental benefits, a 24% increase over 2021. The rise in rebate payments to plans is due in part to incentives for plans to document additional diagnoses that raise risk scores, which in turn, generate higher rebate amounts that make it possible for plans to provide extra benefits. Plans can also charge additional premiums for such benefits, but most do not do this. Beginning in 2019, Medicare Advantage plans have been able to offer additional supplemental benefits that were not offered in previous years. These supplemental benefits must still be considered “primarily health related” but CMS expanded this definition, so more items and services are available as supplemental benefits.

Most enrollees in individual Medicare Advantage plans (those generally available to Medicare beneficiaries) are in plans that provide access to eye exams and/or glasses (more than 99%), hearing exams and/or aids (98%), a fitness benefit (98%), telehealth services (98%), and dental care (96%). Similarly, most enrollees in SNPs are in plans that provide access to these benefits. This analysis excludes employer-group health plans because employer plans do not submit bids, and data on supplemental benefits may not be reflective of what employer plans actually offer.

Though these benefits are widely available, the scope of specific services varies. For example, a dental benefit may include preventive services only, such as cleanings or x-rays, or more comprehensive coverage, such as crowns or dentures. Plans also vary in terms of cost sharing for various services and limits on the number of services covered per year, many impose an annual dollar cap on the amount the plan will pay toward covered service, and some have networks of dental providers beneficiaries must choose from. Enrollees in SNPs have more access to certain benefits compared to enrollees in individual plans, such as over the counter drug benefits (96% vs 84%); transportation (90% vs 39%); a meal benefit (79% vs 71%) and in-home support services (20% vs 12%). However, there is no publicly available data on how frequently supplemental benefits are utilized by enrollees or the amounts they pay out-of-pocket for these services.

As of 2020, Medicare Advantage plans have been allowed to include telehealth benefits as part of the basic Medicare Part A and B benefit package – beyond what was allowed under traditional Medicare prior to the public health emergency. These benefits are considered “telehealth” in the figure above, even though their cost may not be covered by either rebates or supplemental premiums. Medicare Advantage plans may also offer supplemental telehealth benefits via remote access technologies and/or telemonitoring services, which can be used for those services that do not meet the requirements for coverage under traditional Medicare or the requirements for additional telehealth benefits (such as the requirement of being covered by Medicare Part B when provided in-person). The majority of enrollees in both individual plans and SNPs have access to remote access technologies (72% and 80%, respectively), but just 4% of enrollees in individual plans and in SNPs have access to telemonitoring services.

A small share of Medicare Advantage enrollees in individual plans (less than 10%) have access to Special Supplemental Benefits for the Chronically Ill (SSBCI), but a larger share of enrollees in SNPs have access to these benefits

Beginning in 2020, Medicare Advantage plans have also been able to offer extra benefits that are not primarily health related for chronically ill beneficiaries, known as Special Supplemental Benefits for the Chronically Ill (SSBCI). The majority of plans do not yet offer these benefits. Fewer than half of all SNP enrollees are in plans that offer some SSBCI. The share of Medicare Advantage enrollees who have access to SSBCI benefits is highest for food and produce (9.6% for individual plans and 35.1% for SNPs), meals (beyond a limited basis) (7.8% in individual plans and 17.3% for SNPs), transportation for non-medical needs (6.5% for individual plans and 20.5% for SNPs), and pest control (6.4% for individual plans and 18.9% for SNPs).

Nearly all Medicare Advantage enrollees are in plans that require prior authorization for some services

Medicare Advantage plans can require enrollees to receive prior authorization before a service will be covered, and nearly all Medicare Advantage enrollees (99%) are in plans that require prior authorization for some services in 2022. Prior authorization is most often required for relatively expensive services, such as Part B drugs (99%), skilled nursing facility stays (98%), and inpatient hospital stays (acute: 98%; psychiatric: 94%), and is rarely required for preventive services (6%). Prior authorization is also required for the majority of enrollees for some extra benefits (in plans that offer these benefits), including comprehensive dental services, hearing and eye exams, and transportation. The number of enrollees in plans that require prior authorization for one or more services stayed the same from 2021 to 2022. In contrast to Medicare Advantage plans, traditional Medicare does not generally require prior authorization for services and does not require step therapy for Part B drugs.

Since 2015, the highest share of Medicare Advantage enrollees are in plans that receive high quality ratings (4 or more stars)

For many years, CMS has posted quality ratings of Medicare Advantage plans to provide beneficiaries with additional information about plans offered in their area. All plans are rated on a 1 to 5-star scale, with 1 star representing poor performance, 3 stars representing average performance, and 5 stars representing excellent performance. CMS assigns quality ratings at the contract level, rather than for each individual plan, meaning that each plan covered under the same contract receives the same quality rating; most contracts cover multiple plans.

In 2022, nearly 9 in 10 (86%) Medicare Advantage enrollees are in plans with a rating of 4 or more stars, an increase from 2021 (73%) and the highest share enrolled since 2015. An additional 3 percent of enrollees are in plans that were not rated because they are in a plan that is too new or has too low enrollment to receive a rating. Plans with 4 or more stars and plans without ratings are eligible to receive bonus payments for each enrollee the following plan year. The star ratings displayed in the figure above are what beneficiaries saw when they chose a Medicare plan for 2022 and are different than what is used to determine bonus payments.

Typically, star ratings are calculated annually based on data from the previous year. However, due to the COVID-19 pandemic and disruptions to data collection, as well as “to avoid inadvertently creating incentives to place cost considerations above patient safety”, CMS modified the calculation of star ratings. For some measures, if the rating on that measure was lower than the prior year, the ratings reverted back to the 2021 value to hold plans harmless. The substantial increase in the number of MA-PD enrollees in plans with 4 or more stars from 2021 may be due to these and other methodological changes, and has cost implications for the Medicare program as bonus payments reached $10 billion in 2022. In recent years, MedPAC has raised concerns about the star rating system and the bonus payment system, including that star ratings are reported at the contract rather than the plan level, and may not be a useful indicator of quality for beneficiaries.


In 2022, nearly 7 in 10  Medicare Advantage enrollees (69%) are in plans that do not charge a premium (other than the Part B premium) with the remaining third paying a premium, averaging about $58 per month. Most enrollees are in plans that provide access to a variety of supplemental benefits, such as eye exams, dental and fitness benefits. Nearly all enrollees are in plans that require prior authorization for some services. Medicare Advantage cost sharing for Medicare-covered and other benefits varies across plans and can be lower than traditional Medicare, but that is not always the case. Plans also vary in in terms of provider networks and prescription drug benefits, which are beyond the scope of this analysis, but are important considerations for consumers.

While data on Medicare Advantage plan availability and enrollment and plan offerings is robust, the same cannot be said about service utilization and out-of-pocket spending patterns, which is essential for assessing how well the program is meeting its goals in terms of value and quality and to help Medicare beneficiaries compare coverage options. As enrollment in Medicare Advantage and federal payments to private plans continues to grow, this information will become increasingly important.

Meredith Freed, Jeannie Fuglesten Biniek, Tricia Neuman are with KFF.

Anthony Damico is an independent consultant.

This analysis uses data from the Centers for Medicare & Medicaid Services (CMS) Medicare Advantage Enrollment, Benefit and Landscape files for the respective year. KFF is now using the Medicare Enrollment Dashboard for enrollment data, from March of each year.

In previous years, KFF had used the term Medicare Advantage to refer to Medicare Advantage plans as well as other types of private plans, including cost plans, PACE plans, and HCPPs. However, cost plans, PACE plans, HCPPs are now excluded from this analysis in addition to MMPs. In this analysis, KFF excludes these other plans as some may have different enrollment requirements than Medicare Advantage plans (e.g., may be available to beneficiaries with only Part B coverage) and in some cases, may be paid differently than Medicare Advantage plans. These exclusions are reflected in both the 2022 data and in data displayed trending back to 2010.

For calculating how much Medicare beneficiaries could pay out-of-pocket for an inpatient hospital admission, we used the 2022 Medicare Plan Finder Benefit Summary data. For traditional Medicare, beneficiaries without supplemental coverage would incur the Part A hospital deductible of $1,556 in 2022 (for one spell of illness). For Medicare Advantage, we use 2022 Medicare Plan Finder data to calculate out-of-pocket costs for inpatient stays for Medicare Advantage enrollees, weighted by 2022 plan enrollment.

The analysis does not take into account deductibles that some Medicare Advantage enrollees face, and if taken into account, would increase costs for some enrollees. The analysis also does not take into account maximum out-of-pocket limits under Medicare Advantage, which would cap the amount enrollees pay for their care, including hospitalizations. It is possible that some Medicare Advantage enrollees would reach their out-of-pocket limit during their inpatient stay, particularly if they had incurred high expenses prior to an inpatient admission. However, in 2022 the average out-of-pocket maximum is $4,972, which is above the cost-sharing amount that all Medicare Advantage enrollees would pay for a 7-day hospital stay, assuming no other medical expenses during the coverage year.


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