FREE NEWSLETTER
Go to main Forum page »
The Trump administration plans to increase payments to next year’s Medicare Advantage plans by less than 0.1% on average — far below what the industry had expected.
The Centers for Medicare and Medicaid Services, also proposed to restrict further how insurers can code the illnesses of their Medicare Advantage enrollees.
These moves are probably necessary given MA costs Medicare more than traditional coverage as opposed to the planned savings.
HOWEVER, retirees using MA may be in for a shock. Higher premiums, lower benefits or both and possibly in some cases, insurers dropping out of the market.
Watching your medical expenses and thinking about alternatives to MA during 2026 may be prudent.
With such changes or even close to them, it won’t be business as usual for Medicare Advantage plans.
I believe the largest impact will be in more rural markets. Here in rural Iowa, we see companies offering the MA plans, but providers dropping from ALL MA plans.
The impact will also hit those with a dual plan and simply push cost to local Medicaid programs.
Are the providers dropping MA not taking Medicare G?
It’s not a matter of taking Medigap plans. As long as provider has not entirely dropped out of Medicare (rare), Medigap is automatic. There is no in or out.
It will be interesting to see how this plays out. We are covered by my wife’s NYC retirees’ plan (Aetna MA). Costs are very minimal and we both also receive Part B premium and IRMAA reimbursement. The City tried to make changes to our coverage 3-4 years ago that would have increased our costs but the courts ruled in our favor on the basis that both sides are contractually bound to the negotiated agreement because both sides made concessions that they might not have made if they had a crystal ball. I’m sure this will impact negotiations for current employees but it appears that we will be okay.
Do you feel restrained at all regarding where and from whom you can receive health care services?
I don’t know about public unions, but generally retirees are not protected by union contracts beyond the term of the contract in effect when they retired. Employers, including my own, routinely change retiree benefits regardless of what was negotiated previously or what was given up to get them.
Same here. I’m on my wife’s Humana MA plan through her retirement plan. We’re happy with the services and coverage. I have concerns about the plan being shut down, or becoming more expensive, as RQ mentions below.
We’ve been on our SERS MA plan through the Ohio School Retiree System for two years now. We are completely satisfied with the cost, the network, the providers, the services and the perks. We have had no cost increases, not our family doctor cost of visit went from$20 to$0.
I’m sure you do and so do many others. The thing is all that exists only because the MA plans are over subsidized by Medicare.
If they were on a fair footing with Medicare, that is, they cost no more than regular Medicare all those perks could not exist without higher premiums and lower perks.
MA plans were supposed to be more efficient, better manage costs and thus save money, but that a not what happened.
What you experience cannot continue as is.
The entire Medicare system in drowning in gross over treatment and considerable fraud. When patients have no skin or minimal skin the game they do not care about fees being charged.
I am a retired internist and must tell you I think you are missing a lot of the problem. Most of it is legacy decisions with now political obstacles to undo, because rich institutions and physician groups will loose big.
Clearly fraud exists. You would think it would be easy to identify the fraud in one oncologist’s practice, owned by the only hospital in town in small town in WY when he was in the top 5 billers nationwide year after year and billing for 75 patients a day ( see Propublica). I have never understood why MC cannot look at the money out the door and identify where there are problems. It may be antiquated computers etc.
Limiting daily payouts to volume standards (75 patients a day is clearly fraud) would help but this would probably require a new law.
A number of problems are holdovers that require new regs. Hospital based doctors for years have been paid more for outpatient procedures because MC had data the costs in hospitals were higher
This worked well until hospitals realized they could offer outside doctors more money and buy their practices.
The way to deal with “over treatment” is to require every MC patient to have a PCP and pay that PCP a decent reimbursement and incentivize them to talk to patients. When MC pays more to remove a wart than talk about cancer care, it is obvious what the problem is.
However, this will require eliminating the procedural specialists strangle hold on the rate setting boards MC is required to use to set rates. It will be fought tooth and nail by every speciality board in the country with their large lobbying budgets.
Medicare does virtually no care review, only retrospective claim review and then not much and fraud even error payments can take years to find.
People scream about pre-certification, even referral requirements in the non Medicare world, can you imagine applying that to Medicare population?
My wife used to go to a ENT to have ear wax removed. Medicare paid. Now she goes to her primary and his PA does it.
It’s not the fees it’s the utilization. Only Medicaid pays lower fees.
Maybe someday people will realize you can’t have multiple systems all paying different fees, all dealing with segmented populations and have a good result.
Skin in the game is a red herring. It only means some at the very basic level like using genetic drugs. Nobody is shopping for a better deal, nor should they if health care for a serious condition is at stake.
Let’s say your doctor orders an MRI. You call place one. They can see you in three days at $1,000 – mostly paid by insurance. You call place two, the price is $700 but they can’t see you for three weeks. What would you do?
Availability may not be a factor. I get MRIs and CTs routinely. I’m to schedule a bone density test. There is nothing so critical with these tests that I need to schedule immediately. I understand that I’m typical for many cancer patients.
Using 2024 data (from Google Gemini), MA enrollment skews toward lower-income and lower-asset beneficiaries. A higher share of enrollees have incomes below roughly $20,000 per person, and about one quarter of Medicare beneficiaries have savings under ~$19,000, with around 10% having no savings or being in debt.
Also, about one in five MA enrollees are in Special Needs Plans, many dual-eligible for Medicare and Medicaid, and enrollment has grown faster among higher-need beneficiaries with multiple chronic conditions.
These groups are heavily targeted by MA plans.
MA clearly plays an important role for lower-income and higher-need beneficiaries. The challenge is balancing that role with cost control, transparency, and long-term sustainability as enrollment continues to skew toward more vulnerable populations. Apologies if this comes off as a political comment.
I never saw this, but given the MA plans often have deductibles and other out of pocket costs non dual eligible retirees who are lower income may not benefit.
Unless the law is changed, except for a few states, (Connecticut, Massachusetts and New York), there is limited ability to leave MA and not be subject to underwriting requirements meaning rejection or higher premiums. Annual open enrollment is not one of those times.
Certain Special Enrollment Periods (SEPs) (like if your MA plan stops serving your area or you move out of the service area) also give you a limited guaranteed-issue window (usually 60-63 days).
Do we believe that this price freeze will only affect Medicare Advantage? Or will original Medicare be affected too?
Yes, this is unique to MA. However, the fee allowances under regular Medicare is also a point of controversy. They are too low and if they get worse there will be problems.
I am a retired MD. My wife and I opted for traditional Medicare with a high deductible supplement and a part D policy. Some of my colleagues opted for MA. They are satisfied with the providers listed as “In network” and enjoy the additional services and lower premium rates, at least lower so far. My question to them is what if the providers they prefer are no longer in network next year? I am willing to pay for the peace of mind that we are free to see the providers we prefer, not the ones the insurance company prefers.
This is the “Bone marrow transplant at Bugtussle general hospital” problem. While there may be a few cities in America where all of the hospital provide excellent care, in most palces there are good and lousy hospitals and specialty networks that are cheaper.
What is to stop your MA plan from doind Bone Marrow transplants at Bugtussle general, instead of the University Hospital? nothing.
While Boston, San Francisco, maybe Seattle have almost uniformly excellent facilities, where would you rathe have complicated neuro surgery? Massachusetts General, or Lady of Fatima?
I agree. That’s actually another possibility. The insurance companies may seek to negotiate lower provider fees hence smaller networks. Nobody will be happy.
From a Mark Miller Retirement Revised post minutes ago on Substack:
“A recent Senate committee report documenting how UnitedHealth Group increases revenue through aggressive diagnostic practices. It found that the company has “turned risk adjustment into a business, which was not the original intent.”
Also “MedPAC, the independent commission that advises Congress, has found that Advantage plans are paid nearly $80 billion per year more than Medicare would spend for similar people enrolled in traditional Medicare.”
And finally “Enolled in Advantage and genuinely worried about it’s future? You could consider switching to traditional Medicare during the annual enrollment period later this year. But don’t do that without first making sure you can buy a Medigap supplemental policy.”
I don’t think current regs ever prevent you from buying a medigap policy but after i tia
ly signing up for MA, if you opt out, the medigap providers can use your existing health issues to charge you much higher premiums
What a shame that the big insurers won’t be able to fleece the US as much as they were expecting. It is a shame that seniors who need MA plans will be squeezed further.
If the program had been administered as intended, we never would have gotten to this point. HHS has known for decades that MA was costing more rather than the intended savings.
As I have said many times, the more separate risk pools we have the greater risk of adverse selection and cost shifting.
Your last sentence screams for a single national health care system which covers all U.S. citizens and eliminates the expensive middlemen (insurance companies)!
Yes it does and there will never be a fair system until that happens, but there is no short-term hope. Too many people who scream socialized medicine at the thought – which it isn’t of course.
Insurance companies are not the problem and never were, they don’t add significantly to the cost of care at all. There would be a role for insurance companies just like today. Many are the entities processing claims for Medicare.
Medicare Advantage plans have been bilking the government for years by both upcoming how sick their insured are, and upcoding procedures both leading to unearned income.
See my additional post above.
They have, but guess what the lower Boston, all the goodies are lapped up by seniors which is why more than half use MA which I find ironic because MA plans operate just like regular insurers when it comes to networks, per certification of service, even referrals. All the things people complain about.