Goodbye to Medicare Coverage for Millions of Retirees – The Worst Fears Have Already Been Confirmed

The Medicare plan you are enrolled in is a personal decision that as a beneficiary you need to make every year when open enrollment time comes around, only this year some seniors will not have the opportunity to choose, as millions of them will lose access to their Medicare Advantage plans. This loss is due to insurer cuts made in the aftermath of the implementation of the Inflation Reduction Act.

For seniors who an afford it, there is a version of the plan, better known as Part C or Medicare Advantage, which is a privatized version of the service (while still being heavily supervised by the Social Security Administration) which can expand their coverage with vision and dental at a lower cost than out of pocket regular healthttps://www.medicare.gov/health-drug-plans/health-plans/your-health-plan-optionsh insurance coverage.

After the implementation of the Inflation Reduction Act, many insurance companies have decided to cut these offers due to the increase in cost without an ability to increase their reimbursement rates Kevin Thompson, a finance expert and the founder and CEO of 9i Capital Group, told Newsweek “Insurers are finding it difficult to offer the same plans when reimbursement rates do not cover the increased cost of care. The IRA put pressure on providers by lowering their reimbursement rates which has led insurers to pull out of markets they feel are no longer economically feasible by which to operate.”

The biggest insurers to back out of Medicare Advantage plans

In response to several factors, including the prescription drug price caps introduced by the Inflation Reduction Act, Humana has announced plans to reduce the availability of its Medicare Advantage plans. The company’s decision follows its recent earnings report, which showed a profit of $679 million in the second quarter—a 29 percent decline compared to the same period last year. This adjustment is expected to affect approximately 560,000 members across 13 different markets.

HealthPartners has also revealed that it will not continue offering Medicare Advantage plans managed by UnitedHealthcare starting next year. This decision was made after issues related to delayed payments and frequent coverage denials within the Medicare Advantage plans became problematic, and, as a result, about 30,000 patients need to find alternative coverage.

Centene Corp has also decided to end its Medicare Advantage plans in several states due to the rising cost. This change will impact approximately 40,000 seniors across six states, including Alabama, Massachusetts, New Hampshire, Rhode Island, New Mexico, and Vermont. Centene CFO Andrew Asher stated during the company’s second-quarter earnings call “We’ve said before that we expect to shrink in 2025 as we think about what business is going to serve this well in the long run. First we’ve got to chip away at the degree of run rate negative margin and push towards break even and then we can talk about what the margin opportunity is in Medicare.”

And these three major players are not the only ones planning to discontinue service, the MVP Medicare Advantage plan through Vermont’s UVM Health Network, will also be hit by plan cuts, although it will only affect 25,000 seniors in Vermont, a smaller impact.

Michael Ryan, a finance expert and the founder of michaelryanmoney.com, commented on the mass exodus of Medicare Advantage plans “UVM Health, Humana, Centene, they’re all feeling the squeeze. The Inflation Reduction Act is playing its part too, though it’s a bit of a double-edged sword. “For seniors, this is more than just an inconvenience. It’s a potential financial gut punch. I’ve had clients who relied on their Advantage plans for dental work, vision care, you name it.”

Chris Fong, a Medicare expert and the CEO of Smile Insurance Group concurs but takes a cheerier approach “That being said, the termination of a member’s plan can be seen as a positive for those who want to enroll into a Medicare Supplement plan. Typically, someone who is outside of their Medicare Supplement Open Enrollment Period or Medicare Advantage Trial Period will need to go through medical underwriting to determine acceptance and premium. This usually makes it nearly impossible for people who have medical conditions to qualify for a Medicare Supplement plan at a reasonable premium. The termination of a member’s plan grants them a guaranteed acceptance to a Medicare Supplement.”

The existing plans will still be valid until December 31, however, seniors who do not select a new plan by the time the current one ends will be automatically transitioned to traditional Medicare, which provides fewer benefits. The open enrollment period for these plans began on October 15 and will go on until December 17.