Enrollment in the privatized Medicare Advantage plans only increased 3.8% overall from February 2024 to February 2025. If enrollment remains at that level throughout 2025, it will be the lowest for MA since 2007, based on an analysis of data from the Centers for Medicare and Medicaid (CMS).
A major reason for the slower growth is that heading into the Medicare Annual Enrollment Period, Oct. 15 – Dec. 7, 2024, Humana, CVS – Health Aetna, Wellcare-Centene, and Cigna terminated multiple “unprofitable” MA plans across America and left 1.1 million beneficiaries without plan coverage. Another reason is worse benefits and fewer plans available coming into 2025.
The growth path that MA had been on acquired 54% (34.4 million) of the seniors’ healthcare insurance market. That growth translated to massive profits for insurers, which receive a per-member, per-month fee for covering their beneficiaries’ health needs, but also contributed to MA costing taxpayers $88 billion in 2024, significantly more than traditional Medicare.
In late 2024, operating profits for the four largest MA insurers, UnitedHealthcare, Humana, CVS and Elevance, fell due to enrollees’ high healthcare costs.
UnitedHealthcare, the largest of the MA plan providers, saw its operating income fall 5% from year-to-year. Elevance’ operating income was down 10% and Humana’s dropped 51%. CVS-Aetna lost $984 million in 2024, compared with a profit of $3.9 billion in 2023.
In an effort for financial turnarounds, MA insurers have eliminated unprofitable markets and for many remaining plans premiums and out-of-pocket costs have been increased and benefits reduced.
Senate Finance Committee Ranking Member Ron Wyden (OR), House Ways and Means Committee Ranking Member Richard Neal (MA-01) and House Energy and Commerce Committee Ranking Member Frank Pallone (NJ-06) have warned that MA is failing to live up to the standards Americans expect of the Medicare program.
I notified NRLN members in a February 7 email of the posting of a new position paper titled: Importance of Enforcing Guaranteed Issue Right and Medicare Special Enrollment Period
As demonstrated by MA plan insurers (and company plan administrators) may terminate group or individual plans, but federal law mandates Guarantee Issue Right (GIR) and Special Enrollment Period (SEP) protections for Medigap and Medicare Advantage plan beneficiaries.
When the MA insurance companies cited above terminated multiple “unprofitable” MA plans across America an NRLN survey received responses from members in 17 states. Seventy-five percent of respondents said their MA plans had been terminated for 2025, while 25% said they did not think so. Sixty-eight percent of those who lost coverage said they did not receive a GIR and SEP notice.
The NRLN will use its newly written position paper in meetings this month to try to convince members of Congress, the new Secretary of Health and Human Services and CMS to enforce the federal law on GIR and SEP and to implement the NRLN’s recommended remedies for AT&T, IBM, Avaya, TVA and other retirees because their former employers and/or healthcare insurance companies did not adhere to the federal statute, 1882[42 U.S.C. 1395ss].
A GIR prohibits insurance companies from denying coverage or overcharging an applicant for an original Medicare Supplement (Medigap) or MA policy, regardless of pre-existing health conditions. An SEP allows one to shop for the best deal possible for a Medigap or MA plan without underwriting which would cause individuals to pay more for healthcare insurance.
The termination of MA plans affecting 1.1 million of us in 2024 was blamed on higher cost by insurers. I’m concerned that what we experienced in 2024 is the beginning of a phase we had predicted could come later, by 2030. Many of the 37 million in MA plans who were age 65 in 2010, are now 80 with more chronically ill. Higher chronic disease related costs may cause insurers to ask Congress for subsidies or ask us to pay higher premium, deductible, copay and co-insurance (out-of-pocket maximum) payments to cover higher chronic illness costs.
This expected trend will not stop until chronic illness costs are curtailed by more cures and operational cost improvements. MA plan terminations in 2024 were unexpected, we do not want to see any more retirees trapped by plan terminations without the legal protection of a GIR and adequate SEP. Watch for updates.
Bill Kadereit, President
National Retiree Legislative Network
