Medicare Advantage plans are extremely popular, with the Kaiser Family Foundation estimating that by 2024, greater than half of Medicare beneficiaries can be enrolled in these plans for the primary time.
But changes are coming. Those enrolled in or considering Advantage plans should be careful when evaluating plans during open enrollment season this fall. There might be significant changes to existing Advantage plans.
Medicare Advantage plans are popular because, for relatively healthy beneficiaries, out-of-pocket costs are typically lower than those for a package of original Medicare combined with Medicare complement insurance and Part D drug coverage. Advantage plans also offer advantages not included in original Medicare.
Advantage plans are popular with the insurers that supply them, also due to their profitability.
But Medicare continues to eat the next percentage of federal government spending every year. According to estimates by the Centers for Medicare and Medicaid Services. Government policymakers proceed to revise this system to scale back spending on Medicare, particularly for Medicare Advantage plans.
Lower payments to Medicare Advantage sponsors are expected to lead to changes to plans in 2025, similar to higher premiums, copayments and deductibles, and reduced coverage.
We are within the second yr of a three-year period wherein CMS is reducing Medicare spending, with a specific concentrate on reducing Medicare Advantage spending. the CEO of UnitedHealth warned in a recent conference call.
Another warning got here from CVS Health, the owner and operator of Aetna Medicare Advantage plans. CVS recently announced that first-quarter earnings were below expectations and that 2024 earnings can be lower than the estimate the corporate had issued three months earlier.
CVS has aggressively marketed its Medicare Advantage business for 2024. Admission of about 200,000 additional members than expected. The company also purchased a senior medical clinic and a house health care company that primarily serves Medicare beneficiaries.
Another warning was issued earlier this yr by Humanawhich announced that its Medicare Advantage business was not performing in addition to expected.
Both CVS and Humana said in conference calls that it might take not less than a couple of years to revive profit margins on their Medicare Advantage plans.
As the businesses expanded their Medicare Advantage business, government regulators began planning cuts to payments to insurers. Medicare officials recently announced that reimbursements under the Advantage plan in 2025 can be lower than insurers expected.
In addition, members’ use of medical services increased beyond corporations’ estimates.
CVS said its members used more outpatient services in the primary quarter and likewise had more inpatient hospital admissions. The company said it expects greater than half of the overspending occurred in the primary quarter only and is unlikely to be repeated.
Medicare officials are also making changes to this system’s advantages, but these changes usually are not being widely announced.
For example, this system recently announced that generally it would not pay for blood tests that may detect early signs that a transplant is being rejected by the patient’s body. Instead, patients must wait until there are enough symptoms to warrant a biopsy, in keeping with current editorials in The Wall Street Journal.
Expect more such profit cuts in each original Medicare and Medicare Advantage.
During open enrollment this fall, Medicare Advantage members should closely review details about their current plans for details about changes for 2025.
You also needs to develop alternative plans in case the 2025 changes make the plan unattractive. A alternative plan could involve switching to original Medicare and adding Medicare supplemental insurance and Part D prescription policies. Another alternative is to review the terms of other Medicare Advantage plans offered in the world.
