From Fortune · Caroline Catherman · · 2m
Medicare Advantage plans shrink as insurers cut benefits
UnitedHealthcare and Humana are ending nearly 1 million Medicare Advantage plans for 2027, cutting dental benefits and raising costs as payers shift strategy.
In brief
UnitedHealthcare and Humana are ending nearly 1 million Medicare Advantage plans for 2027, cutting dental benefits and raising costs as payers shift strategy. UnitedHealthcare and Humana are ending Medicare Advantage plans affecting nearly 1 million people in 2027, cutting benefits and raising costs as major insurers…
Insurers pull back from Medicare Advantage
The Centers for Medicare and Medicaid Services describes Medicare Advantage 2027 plan options as stable with lower average premiums, but payers are increasing cost-sharing and cutting supplemental benefits.
Benefits shrink, costs rise for seniors
Major carriers cut dental benefits and raised enrollees' cost-sharing requirements in Medicare Advantage for 2027. Clover Health's maximum out-of-pocket cost increased by one thousand one hundred forty-four dollars.
What seniors may not realize
A senior may keep their plan but lose the same level of benefit from the previous year, according to Alexis Levy, senior partner at consulting firm HealthScape Advisors.
“A senior may be able to keep their plan, but that doesn't mean they're going to have the same level of benefit that they had from the previous year, and in many cases, they may not.”
Zero-dollar premiums disappear
There are no longer zero-dollar premiums offered to 4 million standalone Part D drug plan enrollees who got them last year. Medicare Advantage plans with zero-dollar premiums also dropped this year.
UnitedHealthcare and Humana exit plans
UnitedHealthcare is ending plans impacting about 390,000 members. Humana is ending a Medicare Advantage plan affecting about 600,000 people, amounting to about 8 percent of its nearly 7.2 million members.
Why payers end plans
When payers end a plan, they either want to lose those customers or get them to switch to a different, typically pared down and more profitable plan, according to Brooks Conway at Oliver Wyman.
Shift toward HMOs and special needs plans
Payers are decreasing preferred provider organization plan offerings and maintaining or adding health maintenance organizations and special needs plans. These plans have more limited networks and higher cost-sharing.
Chronic special needs plans accelerate
The increase in chronic special needs plans is continuing to ramp up this year. Experts say chronic condition plans are the growth engine for the Medicare Advantage market.
“We're still seeing the chronic condition plans as the growth engine for the MA market.”
The main idea
UnitedHealthcare and Humana are ending Medicare Advantage plans affecting nearly 1 million people in 2027, cutting benefits and raising costs as major insurers prioritize profits over growth.
