Why Medicare Advantage providers are cutting plans — and what to do if your coverage is affected

In recent years, Medicare Advantage providers have been slashing plans due to soaring costs and dwindling profit margins. Humana, for instance, announced it will discontinue some plans next year, affecting over half a million seniors. This is the second consecutive year of downsizing for the company, which affected around 194 counties this year.

UnitedHealthcare also terminated plans serving more than 600,000 seniors. Medicare Advantage, popular among nearly 35 million enrollees, typically covers extra benefits like prescription drugs, dental care, and fitness classes. However, increased provider costs have led insurers to shut down plans, trim benefits, and raise deductibles.

David Lipschutz, an associate director at the Center for Medicare Advocacy, noted that plan sponsors prioritize shareholder interests over enrollees, leaving individuals to scramble for new coverage. Insurers are shedding plans that are dragging down profitability, aiming to hit a sustainable margin of 3% by 2028, according to Humana CFO Celeste Mellet.

Despite the cuts, most seniors on Medicare Advantage still have options, including plans covering prescriptions, vision, dental, and hearing benefits. However, enrollees may face higher out-of-pocket prescription copays and the elimination of certain benefits. Medicare Advantage plans also use cost-management tools like prior authorization, which can complicate care access.

If a plan is terminated, enrollees may be automatically enrolled in a replacement plan or switch to traditional Medicare during the annual open enrollment period. It's crucial to check if doctors and providers are part of the new plan's network, as these networks are ever-changing.