Thinner benefits and coverage changes await many Americans who buy health insurance this fall. If the plan is still available in 2025.
More than a million people may have to find new coverage as major insurers cut costs and withdraw from the market for Medicare Advantage plans, a privately run version of the federal government’s coverage program mostly for people 65 and older.
Industry experts also predict some price increases for Medicare prescription drug plans as coverage improvements are needed.
Voters will learn about the insurance changes just weeks before electing the next president and as Democrat Kamala Harris campaigned on promises to lower health care costs. Early voting has already begun in several states.
“This could be bad news for Vice President Harris. If the premium goes up, it’s a clear sign that you’re paying more,” said Massey Whorley, an analyst for health consulting firm Avalere. .”
Insurance agents say the election disruptions add another complication to an already challenging annual enrollment window that begins next month.
Insurers withdraw from Medicare Advantage
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. Insurers say they expect more people than usual to have to seek new coverage by 2025 as insurers end plans or leave the market.
Health insurer Humana expects more than half a million customers — about 10% of its total — to be affected by pulling Medicare Advantage plans from premises across the country. Many customers will be able to transfer to other Humana plans, but company leaders still expect to lose several hundred thousand customers.
Aetna CVS Health posted similar losses, and other large insurers said they would leave some states.
Insurers say rising costs and use of care, as well as reimbursement cuts from the government, are forcing them to pull back.
Some people can expect a difficult search
When insurance companies leave the Medicare Advantage market, they tend to stop selling plans that have lower quality ratings and that have a higher proportion of Black buyers, said Dr. Amal Trivedi, a Brown University public health researcher.
He notes that exiting the market can be particularly difficult for those with few doctors and patients with cognitive problems like dementia.
Most markets still have dozens of plan options. But finding new options involves understanding the out-of-pocket costs for each option, plus figuring out how doctors and regular prescriptions are covered.
“People don’t like change when it comes to health insurance because you never know what’s on the other side of the fence,” said Tricia Neuman, a Medicare expert at KFF, a nonprofit organization that studies health care.
Plans that don’t leave the marketplace can raise deductibles and cut benefits like cards used to pay for utilities or food.
That has proven popular in recent years as inflation has risen, said Danielle Roberts, founder of Fort Worth, Texas, insurance agency Boomer Benefits.
“It’s hard for people on fixed incomes to choose a health plan for the right reasons … when $900 on a flex card in free groceries looks good,” he said.
Don’t “sleep” on choosing a Medicare plan
Prices may also increase for some so-called stand-alone Part D prescription drug plans, which are paired 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 drop an average of 4% to $40 next year.
But brokers and agents say premiums can vary, and still expect increases. They also expect fewer plan options and changes to the formulary, or list of covered drugs. Roberts said he has seen premium increases of $30 or more from some plans for next year.
Any price changes would reach a customer base known to switch plans for premium changes as small as $1, said Fran Soistman, CEO of online insurance marketplace eHealth.
The changes come as the congressional-approved coverage review continues. In particular, out-of-pocket drug costs would be capped at $2,000 for those on Medicare, an effort championed by Democrats and President Joe Biden in 2022.
In the long run, these changes will lead to “richer benefits,” Whorley said.
KFF’s Neuman noted that the cap on drug costs would help cancer patients and others with expensive prescriptions. He estimates that about 1.5 million people will benefit.
To prevent a spike in premiums due to the change, the Biden administration will pull billions of dollars from the Medicare trust fund to pay insurers to keep premium prices down, a move some Republicans have criticized. Insurers will not be allowed to raise premium prices beyond $35 next year.
People will be able to register for 2025 coverage between October 15 and December 7. Experts say all the potential changes make it important for shoppers to closely study the options or new coverage they want to renew.
“This is not a year to sleep, it’s just a re-enrollment of the status quo,” said Whorley, the health care analyst.
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