Changes Coming to Medicare Advantage: What It Means for You

Next year, there are going to be major changes to Medicare Advantage (MA) plans. Humana and CVS, two of the largest insurance companies in this program, are planning to cut benefits and reduce their coverage areas. This means many seniors might need to find new plans, creating opportunities for other insurance companies.

Why Are These Changes Happening?

Humana and CVS are facing financial problems. More seniors are using medical services than expected, which costs the companies more money. Additionally, new rules from the government have made it harder for these companies to make money from MA plans. To fix this, they plan to cut back on benefits and pull out of some areas.

What This Means for Seniors

Because of these changes, hundreds of thousands of seniors might need to switch their MA plans. This could mean finding new doctors or paying more out of pocket for their medical care. Other insurance companies, like UnitedHealth, might gain many of these members and become even more dominant in the MA market.

If Humana and CVS cut benefits, seniors might lose access to some of the extras they’ve come to rely on. This can be worrying, but it also means that seniors have a chance to shop around and find new plans that meet their needs better.

Changes coming to Medicare?

Insurers will likely cut supplemental benefits that go beyond regular Medicare. This includes things like gym memberships, dental coverage, and prepaid debit cards for medical supplies. These extras have been a big draw for many seniors, but they are also costly for insurance companies to provide. Insurers need to keep important medical benefits competitive to attract seniors, but they also need to cut costs to stay profitable.

The Rules They Must Follow

Insurers can’t just cut benefits as much as they want. They must follow a rule called the total beneficiary cost (TBC), which limits how much they can change benefits each year. This rule is in place to protect seniors from sudden, large increases in costs. Because of TBC, insurance companies need to be strategic about which benefits they cut and how they manage their costs.

For example, they might cut back on benefits that are less visible to seniors, like over-the-counter debit cards, while keeping more noticeable benefits, like low co-pays for doctor visits. They must balance making their plans attractive to seniors and managing their expenses.

What Happens Next?

We’ll know more about these changes in October when the Centers for Medicare & Medicaid Services (CMS) releases new data on the 2025 plans. The real impact will be seen during the open enrollment period, ending in March, when seniors choose their new plans.

During this time, seniors should pay close attention to their options. It’s a good idea to review the benefits of different plans and see which one best meets their needs. Even if a plan looks good now, changes might make another plan a better choice.

Conclusion

The upcoming changes to Medicare Advantage plans mean that many seniors might need to find new coverage. While Humana and CVS deal with their financial issues, other insurers will have a chance to gain new members. This period of change will shape the future of Medicare Advantage, affecting both insurers and beneficiaries.

Seniors should stay informed about their options and be prepared to switch plans if necessary. It’s important to understand what benefits are most important and to choose a plan that provides the best coverage at the best cost. By staying proactive, seniors can navigate these changes and find the best possible care.