Lower benefits and coverage changes await many older Americans shopping for health insurance this fall. That is if their plan is still available in 2025.
More than 1 million people will likely have to find new coverage as major insurers cut costs and withdraw from the markets Medicare Advantage plans, the privately run version of the federal government’s coverage program mostly for people 65 and older.
Industry experts also expect some price increases for Medicare prescription drug plans as needed coverage improvements begin.
Voters will learn about the insurance changes just weeks before they choose the next president, and as Democrat Kamala Harris campaigns on promises to lower health care costs. Early voting has already begun in some states.
“This could be bad news for Vice President Harris. “If that premium goes up, that’s a very clear sign that you’re paying more,” said Macy Worley, an analyst at healthcare consulting firm Avalere. “This has major implications for how they view the performance of the current administration.”
Insurance agents say the election distraction adds another complication to an already difficult annual filing window that begins next month.
Insurance companies are withdrawing from the Medicare Advantage program
Medicare Advantage plans will cover more than 35 million people next year, or about half of all people enrolled in Medicare, according to the federal government. Insurance agents say they expect more people will have to find new coverage in 2025 because their insurer either terminated the plan or left the market.
Health insurer Humana expects more than half a million customers to be affected — about 10% of its total — as it recalls Medicare Advantage plans from places across the country. Many customers will be able to switch to other Humana plans, but company leaders still expect to lose a few hundred thousand customers.
CVS Health subsidiary Aetna expects a similar loss, and other major insurers have said they will leave several states.
Insurers say rising costs and care utilization, coupled with reimbursement cuts from the government, are forcing them to pull out.
Some people can expect a difficult search
When insurers leave Medicare Advantage markets, they tend to stop selling plans with lower quality ratings and those with a higher proportion of Black buyers, said Dr. Amal Trivedi, a public health researcher at Brown University.
He noted that exiting the market can be particularly difficult for people with multiple doctors and for patients with cognitive problems such as dementia.
Most markets will still have dozens of plan options. But finding a new option requires understanding the out-of-pocket costs of each option, as well as knowing how to cover doctors’ costs and regular prescriptions.
“People don’t like change when it comes to health insurance because you don’t know what’s on the other side of the fence,” said Tricia Newman, a medical care expert at KFF, a nonprofit that researches health care.
Plans that do not leave the marketplace may increase deductibles and reduce perks such as cards used to pay for utilities or food.
These products have proven popular in recent years as inflation has risen, said Danielle Roberts, co-founder of insurance agency Boomer Benefits.
“It’s really hard for someone on a fixed income to choose a health plan for the right reasons… when $900 on a flexible card in free groceries sounds so good,” she said.
Don’t “sleep” when choosing a Medicare plan
Prices may also rise for some so-called standalone Part D prescription drug plans, which people pair with traditional Medicare coverage. KFF says the population includes more than 13 million people.
The Centers for Medicare and Medicaid Services said Friday that premiums for these plans will fall about 4% on average to $40 next year.
But brokers and agents say premiums can vary widely, and they still expect some increases. They also expect fewer plan choices and changes in formularies or lists of covered drugs. Roberts said she has already seen premium increases of $30 or more from some plans for next year.
Any price change would hit a customer base known for switching plans for premium changes as small as $1, said Fran Swestman, CEO of online insurance marketplace eHealth.
The changes come with the start of a comprehensive coverage reform approved by Congress. In particular, out-of-pocket drug costs will be capped at $2,000 for those receiving Medicare, an effort supported by Democrats and President Joe Biden in 2022.
In the long run, these changes will lead to “much richer benefits,” Worley said.
KFF’s Newman noted that caps on drug costs would be especially beneficial for cancer patients and others with expensive prescriptions. It is estimated that about 1.5 million people will benefit.
To avoid large increases in insurance premiums due to the changes, the Biden administration will withdraw billions of dollars from the Medicare Trust Fund to pay premiums to insurers to keep premium rates low, a move criticized by some Republicans. Insurers will not be allowed to raise premium rates beyond $35 next year.
People will be able to sign up for 2025 coverage between October 15 and December 7. Experts say all the potential changes make it important for shoppers to closely consider any new options or coverage they expect to renew.
“This is not a year to sleep in, just re-sign yourself to the status quo,” said Worley, the health care analyst.
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