Jay Neal read the Annual Notice of Changes to Medicare Advantage Plans with mixed emotions.
His plans became more expensive and had fewer benefits.
Residents of Klamath County, Oregon, saw their monthly premiums increase from $20 to $35. This is a 75% increase. His dental allowance is reduced from $1,000 to $200 every six months, but it's enough to pay for cleanings and “not much else,” he said. Vision benefits have been completely abolished.
There were signs of hope. Medicare has closed the notorious prescription drug coverage gap, commonly known as the “doughnut hole,” by capping drug out-of-pocket costs at $2,000.
Neal said that made “other cost increases and reductions more palatable.” But it remains unclear whether the drugs he relies on will continue to be covered.
This Medicare open enrollment period began on October 15th and runs through December 7th, but enrollees will not be able to afford it as Medicare Advantage insurers cut services and raise premiums to offset ever-shrinking profits due to rising costs. You may notice that you are doing it.
As a result, experts say it's even more important this year for Medicare Advantage members to scrutinize plan changes and consider possible alternatives. Allowing this year's plan to auto-renew without reviewing available options during open enrollment could lock in higher costs or lower service.
“Plans change from year to year because they are redesigned based on cost,” said Karisa Dixon, an expert with the Senior Health Insurance Benefits Assistance Program and Senior Medicare Patrol Program in Multnomah County, Oregon. Ta.
Not all plans are increasing in price. The Centers for Medicare and Medicaid Services said benefits across all plans will remain “stable” while premiums will decline on average.
However, individual plan offerings and insurance company plan lineups are volatile, so subscribers may need to do more homework to find the plan that's right for them.
Choose more Medicare Advantage options
More Americans are choosing Medicare Advantage plans run by private insurance companies over the federal government's traditional Medicare program. After steady growth over the past two decades, the number of people enrolled in Medicare Advantage now exceeds 34 million, representing nearly 55% of the total population enrolled in Medicare, according to the Kaiser Family Foundation.
This year, Medicare Advantage participants were 57% of Oregon's eligible population. Michigan has one of the highest Medicare Advantage rates in the nation at 61%. New Jersey's rate is 43%, according to data from the Centers for Medicare and Medicaid.
Medicare Advantage is popular because the plans typically offer the services of traditional Medicare while layering in additional benefits such as dental, vision, hearing, and prescription drug coverage. These privatized plans are federally subsidized and have out-of-pocket caps, giving beneficiaries financial predictability not found in original Medicare.
As Medicare Advantage grows in popularity, the government is pumping more and more money into private insurance companies to provide the benefits. In 2024, the Centers for Medicare and Medicaid Services is expected to pay out $462 billion to insurers offering Medicaid Advantage. This number is expected to increase by $16 billion in 2025, driven not only by enrollment growth but also by increased costs.
Medicare Advantage insurers say the cost of covering care is rising as more seniors seek out more outpatient and inpatient care.
Executives at UnitedHealthcare, which accounts for about a quarter of the national Medicare Advantage market, told investors on a recent earnings call: expensive medical expenses Some Advantage members were wasting their profits.
Part of the increase is due to older adults delaying care during the COVID-19 pandemic. Your insurance company's own policies may also be at play.
Neeraj Sood, a professor at the University of Southern California Price School of Public Policy, studies benefit utilization and health outcomes for Medicare Advantage enrollees. Sood said the number of Medicare Advantage enrollees receiving annual health exams has increased over the past decade.
“One of the reasons annual health checkups are increasing is because insurance companies want to catch up on things early,” he says. “The flip side of that is that people may be getting annual physicals, which gives insurance companies a better understanding of how sick a patient is. – Advantage plans allow you to receive higher amounts for those patients.”
But Sood said his study also found that Medicare Advantage members spent less time in the hospital and subsequently had less access to care, including rehabilitation services. Sood said his research also found that Medicare Advantage patients are often denied admission even though they request it.
That's because it costs insurance companies more money to cover hospitalization costs, he said.
“Medicare Advantage plans are supposed to give enrollees a fixed amount of money and control their health care costs, so there is an incentive to reduce health care costs in order to make more profit,” he said. said. “If a patient takes more care, they don't get paid any extra, so they try to find ways to manage the patient's disease at the lowest cost.”
Welfare shift
In 2025, enrollees may be exposed to rising costs, especially out-of-pocket costs for prescription drugs and medical care. These changes come as insurers seek to maintain profitability by passing more costs on to members.
Beneficiaries need to carefully consider their options and decide whether the overall value still aligns with their medical needs and budget, said Jennifer Teague, director of health insurance and benefits at the National Council on Aging. He said there is.
Given the government's new $2,000 out-of-pocket drug cap under Medicare Part D, Medicare Advantage carriers that provide drug coverage could potentially end up paying more for patients, Teague said. said. He said caps could manifest in increased copays or the removal of certain drugs from plans. Formulary – List of covered medicines.
“It's very important that people check whether their medications are eligible for next year's drug prescriptions,” Teague said. “We encourage individuals to bring their prescription drug list to their local (State Health Insurance Assistance Program) office to find out which plan they should enroll in for the next year.”
Dixon said insurers have warned that in order to maintain growth and remain profitable, they could cut benefits, exit the market, raise premiums, or a combination of all three. are.
“At the end of the day, they are a business and you can't blame them for waiting to protect their profitability,” Dixon said. “It's a tightrope they have to figure out.”
Some insurers have scaled back their offerings for next year. For example, in Oregon, the number of Medicare Advantage plans with Part D coverage in Multnomah County is scheduled to decrease from 45 this year to 39 in 2025. In Deschutes County, the number of plans with drug coverage will decrease from 22 to eight.
Neal, a Medicare enrollee in Oregon, takes heart medication that used to cost him $150 to $200 a month because his insurance expires at the end of the year. Changes to Medicare this year will close that gap and offset premium increases.
Still, Neil's relief was tempered by uncertainty. As of early October, he wasn't sure whether the drugs he relied on would still be covered by the plan's updated prescriptions.
“It would be devastating if my insurance didn't cover my heart medication,” Neal said. He estimates that one of his medications costs more than $350 a month out of pocket. “For people who are retired and on a fixed income, when I get hit with a monthly bill like this, I would have to ask myself, do I want to eat this week, or do I want to take the medication I need?” How to stay alive?”
For most patients, open enrollment is their only chance to switch to Original Medicare or find a new Medicare Advantage plan that better fits their medical needs and next year's budget. These changes to many plans make it even more important for participants to consider their options, even if they are satisfied with their year-round coverage.
For Neil, his options are limited. In suburban Klamath County, population 69,000, there is only one other Medicare Advantage plan available.
— Kristine de Leon covers consumer health, retail, small business, and data companies. Please contact kdeleon@oregonian.com.
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