10 Medicare Advantage Insights Driving Positive Health Changes
Medicare Advantage (MA) has been a pivotal aspect of healthcare for millions of beneficiaries in the U.S., offering an alternative to traditional Medicare. However, the past year has been turbulent for the industry. As 2025 approaches, several significant changes are taking place that will impact Medicare Advantage plans, beneficiaries, and the insurers offering these plans.
Medicare Advantage Plans Continue Despite Industry Turbulence
Despite the challenges facing the Medicare Advantage sector, many insurers remain confident in their ability to thrive. Four insurers have demonstrated resilience in the face of industry headwinds, continuing to focus on providing high-quality care to beneficiaries. These companies have adapted to regulatory changes and market pressures while maintaining robust plan offerings. This determination suggests that while some plans may be exiting the market, others are capitalizing on the opportunities these changes present.
Multi-Year Contracts Could Lead to Better Health Outcomes
Medicare beneficiaries have the option to switch Medicare Advantage plans annually during open enrollment. However, recent evidence suggests that committing to a multi-year contract with a Medicare Advantage plan could result in better long-term health outcomes. By staying with the same provider for multiple years, beneficiaries may experience improved continuity of care, leading to a deeper understanding of their health needs by their providers. This long-term relationship can be particularly beneficial for managing chronic conditions, ultimately enhancing the overall quality of care received.
Declining Bonus Payments for Medicare Advantage Plans in 2024
A significant development for 2024 is the reduction of bonus payments to Medicare Advantage plans by approximately 8% compared to 2023. This marks the first decline in bonus payments since 2015. The decline, according to a report from the Kaiser Family Foundation (KFF), signals a shift in the financial landscape for MA plans. Notably, UnitedHealthcare received the highest share of these bonuses in 2024, reflecting its continued dominance in the market. However, the overall decrease in bonuses is expected to impact how insurers structure their plan offerings in the future.
CMS Suspends Centene’s Medicare Advantage Enrollment in Missouri
One of the more significant regulatory actions of 2024 was the suspension of new Medicare Advantage enrollments for Centene’s subsidiary in Missouri. This decision by the Centers for Medicare & Medicaid Services (CMS) came after the company failed to meet the required medical loss ratio for three consecutive years. This suspension highlights the importance of compliance with CMS regulations and the financial responsibilities that Medicare Advantage plans must meet to continue serving beneficiaries.
The “Great Disruption” in Medicare Advantage
The Medicare Advantage industry is facing what some executives are calling the “great disruption.” According to SCAN Group CEO Sachin Jain, MD, significant changes are on the horizon that will reshape the future of Medicare Advantage. These disruptions are driven by policy changes, market shifts, and evolving beneficiary expectations. As Medicare Advantage plans navigate these challenges, they are tasked with adapting to a rapidly changing landscape while maintaining quality care for their members.
Educating Members Amid Election-Year Noise
In 2025, Medicare Advantage plans will face the additional challenge of educating their members about significant changes to the program, all while contending with the noise of a major election year. With so much political discourse taking center stage, breaking through the noise to communicate important updates to beneficiaries will be a priority for insurers. Ensuring that members are well-informed about their options during open enrollment is essential, especially given the upcoming changes to the program.
Clever Care Navigates Rising Industry Challenges
Clever Care, a regional MA company, is facing a unique set of challenges as it navigates rising headwinds in the industry. According to interim CEO Karen Walker Johnson, the company’s most significant challenges are not tied to the rising hospital utilization rates among its members. Instead, the company is focused on delivering culturally competent care and meeting the diverse needs of its beneficiaries, which include a significant number of seniors from Asian-American communities.
Changing Expectations of MA Beneficiaries
Medicare Advantage beneficiaries are becoming increasingly savvy, with higher expectations of their plans. Top-rated insurers for customer satisfaction have noticed that members are demanding more personalized care and tailored services. Leaders at four of J.D. Power’s top-ranked Medicare Advantage plans have noted that beneficiaries now expect not only excellent healthcare but also ease of access, digital tools, and seamless communication with their providers. Meeting these expectations is becoming crucial for insurers to maintain member satisfaction and retention.
Humana’s 2025 MA Exits
In a notable development for 2025, Humana announced that it will stop offering Medicare Advantage plans in 13 counties, impacting around 560,000 members. This decision, disclosed by CFO Susan Diamond, reflects the company’s strategic adjustment to market conditions. While Humana remains a major player in the MA space, these exits will affect members who will need to seek alternative coverage options in those counties. This also highlights the importance of reviewing plan options annually, especially in a fluctuating market.
Learning from Medicare+Choice: Lessons from the Past
The challenges facing MA today are not without precedent. According to an analysis from Oliver Wyman, the issues MA plans are encountering can be compared to the difficulties faced by Medicare+Choice, the precursor to MA, in the late 1990s. By learning from these past challenges, insurers can develop strategies to navigate the current turbulence and position themselves for future success.
FAQs
1. What are the key changes coming to MA in 2025?
A. Several significant changes, including plan exits and reduced bonus payments, are expected to reshape the MA landscape in 2025.
2. How will the reduction in bonus payments impact MA plans?
A. The 8% reduction in bonus payments for 2024 could result in changes to plan offerings, as insurers adjust to the new financial realities.
3. What does CMS’s suspension of Centene’s MA enrollment mean?
A. CMS suspended Centene’s enrollment in Missouri due to the company’s failure to meet the required medical loss ratio for three consecutive years, affecting new enrollments.
Conclusion
The MA landscape is undergoing rapid change, with significant updates that will affect both beneficiaries and insurers in the coming years. From declining bonus payments to plan exits and regulatory challenges, Medicare Advantage plans must adapt to a complex environment while ensuring that beneficiaries receive high-quality care. As 2025 approaches, staying informed about these changes will be critical for Medicare beneficiaries seeking the best coverage options for their healthcare needs.
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