Medicare Advantage (MA) plans have seen a surge in popularity due to their expanded benefits and often lower premiums compared to traditional Medicare. But the landscape is shifting. As we approach 2025, MA beneficiaries need to be aware of looming changes that could impact their coverage: benefit cuts and market exits by major insurers.
The Downsizing Trend: Medicare Advantage Cuts
Several key players in the MA market have announced their intentions to scale back:
Humana: The second-largest MA insurer, Humana, anticipates losing “several hundred thousand members” in 2025 due to planned benefit reductions and market exits. This could translate to a 5% decrease in their MA membership.
Aetna (CVS Health): Aetna’s parent company, CVS Health, has indicated that many of its 2025 MA plans will be “leaner” than those in 2024. They project a potential 10% drop in enrollment as they exit certain counties and reduce benefits.
Note: These three insurers represent a third – 33% – of Medicare Advantage enrollment in 2024, so disruptions with them may affect a substantial number of beneficiaries.
Potential Impact on Beneficiaries
Reduced benefits: Beneficiaries may see their current plans offer fewer perks or face higher out-of-pocket costs for certain services.
Fewer plan options: In some areas, particularly rural ones, insurers may exit the market entirely, leaving beneficiaries with limited choices.
Disruption of care: If your plan is discontinued or significantly altered, you may need to find new providers or face gaps in coverage.
Why the Cutbacks?
Insurers point to a “perfect storm” of factors driving these decisions:
Rising Costs: Seniors are utilizing more medical services than insurers anticipated, driving up costs.
Regulators Trying to Curb Overpayments: New regulatory changes are aimed at reducing overpayments — when Medicare pays an insurer more than the amount it is entitled to — impacting insurers’ profitability.
Slowing Growth: After years of rapid expansion, MA growth has slowed down, putting further pressure on insurers’ bottom lines.
Balancing Act: Insurers are grappling with the challenge of maintaining attractive benefits while ensuring financial sustainability.
Which Medicare Advantage Benefits May Be Cut?
While specific details won’t be available until October when CMS releases 2025 bid data, experts predict cuts to supplemental benefits, which are a major draw for MA enrollees. These could include:
Dental coverage
Vision and hearing benefits
Gym memberships
Over-the-counter allowances
Transportation services
What You Can Do
Stay informed: Pay close attention to any communications from your MA plan about changes for 2025. This should come in the form of the Annual Notice of Change (ANOC) letter in mid-September. While many people may ignore this, it’s critical to evaluate changes to your coverage that will be listed in the ANOC for 2025.
Review your coverage during the Annual Enrollment Period (AEP): The AEP runs from October 15 to December 7. Use this time to carefully evaluate your plan and compare it to other options.
Consider your needs: Think about the benefits that are most important to you and prioritize plans that offer those benefits. Often, not all supplemental benefits in Medicare Advantage plans are utilized; because of that, think about what you truly need for the next year, and prioritize plans with those benefits.
Don’t be afraid to switch: If your current plan is no longer meeting your needs, don’t hesitate to switch to a different one.
Work with a trusted partner: Because these MA changes are anticipated across a variety of carriers, it’s important to work with an agency like SmartMatch in order to compare as many plan options as possible, to ensure you’re getting the benefits you need with your plan for 2025.
The Bottom Line
The Medicare Advantage landscape is evolving, and beneficiaries need to be proactive in protecting their healthcare coverage. This doesn’t mean that Medicare Advantage plans should be avoided — there are still plenty of options across the nation. By staying informed and taking action during the AEP, you can ensure you have the plan that best suits your needs in 2025 and beyond.
