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President’s Forum No. 151 | Authors Conclude Medicare Advantage Should be Abolished

NRLN President’s Forum 
By Bill Kadereit

An analysis in the JAMA (Journal of the American Medical Association) Internal Medicine on June 10 concluded: “We think the time has come to declare MA [Medicare Advantage] a failed experiment and abolish it. That would allow redeploying the $88 billion taxpayers will overpay MA this year to upgrade benefits for all Medicare beneficiaries.”

The conclusion was based on the high cost of MA compared to traditional Medicare. For example:

Medicare Payment Advisory Commission (MedPAC), the nonpartisan agency reporting to Congress, recently estimated that MA overpayments added $82 billion to taxpayers’ costs for Medicare in 2023 and $612 billion between 2007 and 2024. Two insurer strategies drive MA overpayments: diagnosis upcoding and avoiding enrollees who are ill and do not contribute to profits.

Although MA insurers must accept all applicants in counties where they offer a plan, they are also free to withdraw from counties where they are accumulating unprofitable enrollees.

Only 2% of Fee-for-Service (FFS) Medicare expenditures go for overhead. But MA insurers incur extra expenses for television advertisements, health care network management, benefit design, executive salaries, health care utilization review, prior authorization, and shareholder profits, driving their overhead up to 14%. 

This is according to a report from Milliman, an international actuarial and consulting firm, on MA financial results for 2022. Milliman estimates applied to subsequent years’ payments, MA overhead for 2007 to 2024 totals $592 billion—equivalent to 97% of taxpayers’ $612 billion overpayments to them during that period.

The authors closed their analysis stating, “A smarter, thriftier way to expand benefits and lower out-of-pocket costs is possible for all Medicare beneficiaries, but first, we must eliminate MA and double down on traditional Medicare, covering all enrollees in an expanded and improved Medicare program. That would be a good deal for patients and taxpayers.”

 

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How to Purchase Medicare Advantage Insurance

Do You Know Whether Your Medicare Advantage Plan Will Continue in 2025?

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Undoubtedly there are thousands of NRLN members with Medicare Advantage (MA) plans. Four MA insurance companies who provide MA plans have announced they will drop over 1 million enrollees across the nation in 2025.

Humana has told investors that the company expects to lose about 560,000, about 10% of its MA enrollees next year after it exits 13 unprofitable markets and trims its plan options. CVS Health Aetna will force 420,000 members to find other coverage. Centene – Wellcare announced in August it will be ending plans which will impact roughly 37,000 enrollees. Up to 5,395 Cigna beneficiaries will have to find new plans. UnitedHealthcare has not announced whether it will drop MA enrollees.

There have been news reports that MA insurers will be adding or raising premiums and increasing the out-of-pocket amounts due to higher expenses and lower profits as MA plan enrollees get older and have more healthcare costs. If your plan is discontinued, it is an opportunity to give thought to whether you want to continue in an MA plan (Part C) or enroll in original Medicare (Parts A and B) and a Medigap plan.

If you have not heard from your MA insurer about the status of your plan for next year, you should immediately contact your MA plan provider or your insurance agent to learn whether your plan will be continued. 

If your plan is going to end on December 31, 2024, you should be sure to obtain a letter or email from your MA plan provider that states, as federal law requires, that you have a Guaranteed Issue Right (GIR) to get another MA plan or go into Original Medicare. 

With a GIR you can acquire an MA plan or enroll in an Original Medicare, and if you choose, buy a supplement policy (Medigap) to cover the 20% that Medicare does not pay. The GIR provides you 63 days after your current MA Plan coverage ends to obtain other healthcare coverage. The upcoming Medicare Open Enrollment period October 15 – December 7 will be available to enroll in a new plan. 

During the 63-day window, you cannot be denied for an MA plan or Original Medicare with a Medigap plan due to a pre-existing medical condition or face underwriting due to your medical history. 

If your MA plan ends and you do not take action to acquire a different MA plan or enroll in Original Medicare you will be automatically enrolled in Original Medicare, but without a Medigap plan. Your MA plan that may be ending could have included Medicare Part D for prescription drugs. If so, it would be wise to shop for and purchase a Medicare Part D plan or an MA plan that includes Part D coverage. 

Keep any letters, notices, or emails from your MA plan stating that your plan will be discontinued. You may need the information to prove your coverage ended to gain a GIR.

 

The NRLN website at www.nrln.org has video to assist anyone who wants to shop for a Medigap plan on www.medicare.gov. Another video will be created and posted in early October on how to search for Medicare Advantage plans on www.medicare.gov

The NRLN wants to help you get the healthcare coverage that is right for you at the best price. Ask your friends to sign up at https://nrln.org//2021/01/email-sign-up/ to receive NRLN emails. We will keep you informed on this MA issue and other issues important to retirees. 

Bill Kadereit, President
National Retiree Legislative Network 

GET READY for Medicare Open Enrollment

Start Getting Ready for Annual Medicare Enrollment

The NRLN will be posting a series of short videos and brief articles to help our members prepare for the annual Medicare enrollment October 15 – December 7, 2024. 

The first video is below. Click on the play icon to learn about three steps you can start taking now to be better prepared for the enrollment period.

  1. Make a list of your healthcare costs.
  2. Note changes to your health.
  3. Make a pros and cons list of traditional Medicare and Medicare Advantage plans.

Send an email to contact@nrln.org to tell us what other information would be useful to you to prepare for enrollment and during enrollment.

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NRLN Grassroots Network is the name for having support from NRLN members to respond to Action Alerts plus having Region, State and Congressional District leaders to support the NRLN’s Washington, D.C. lobbying efforts.

NRLN - Your Source for Medicare Enrollment 2025

MEDICARE AND YOU HANDBOOK 2025

In the News

The articles and opinion pieces below are for information and are not necessarily a reflection of the NRLN’s position on issues.

The NRLN is nonpartisan and its positions on retirement issues are presented in its Legislative Agenda and white papers that can be accessed from under the Legislative Agenda tab on the website main menu.

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Analysis: MA plans classify 3 to 4 times as many hospital stays as observation visits compared with traditional Medicare American Hospital Association – Oct. 24, 2024

Allina may exit Humana’s Medicare Advantage network in 2025, affecting 18,000 Minnesotans The Minnesota Star Tribune – Oct. 23, 2024

Medicare drug plans are getting better next year  Los Angeles Times – Oct. 23, 2024

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Walmart offering same-day prescription drug delivery Axios – Oct. 22, 2024

Medicare drug plans are getting better next year. Some will also cost more. CBS News – Oct. 21, 2024

Humana stock higher on key merger report amid Medicare Advantage hit TheStreet – Oct. 21, 2024

People with certain disabilities are eligible for Medicare under age 65. Here’s who qualifies Fortune – Oct. 21, 2024

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CVS Health stock crushed as Medicare Advantage hit triggers big changes The Street – Oct. 18, 2024

Senate report hits top 3 Medicare Advantage insurers over ‘refusal’ of of skilled nursing, other coverage McKnights Long Term Care News – Oct. 17, 2024

Insulin Coverage: What Medicare Beneficiaries Need To Know For 2025 Forbes – Oct. 17, 2024

Insurers cut Medicare Advantage plans in Oregon, leaving thousands to find new coverage OregonLive.com – Oct. 17, 2024

Opinion: Who’s Really Cutting Medicare? The Wall Street Journal – Oct. 16

Are you ready for all the changes coming to Medicare? WKBN – Oct. 16

When You Need to Pay Taxes on Social Security  U.S. News – Oct. 16

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Medicare Plans Are Making Big Changes for 2025. Here’s How to Navigate Them. The Wall Street Journal – Oct. 15, 2024

Retirees can shop for health-care coverage during Medicare open enrollment. It’s a great time to review costs, experts say CNBC – Oct. 15, 2024

5 Big Changes to Medicare Part D for 2025 (And What to Do About Them) NerdWallet – Oct. 15, 2024

How Trump and Harris Aim to Address Your Health Care NerdWallet – Oct. 15, 2024

Changes in store for Medicare Advantage as open enrollment starts CNN – Oct. 14, 2024

Medicare Open Enrollment for 2025: Everything You Need to Know Newsweek – Oct. 14, 2024

The 2025 Social Security COLA Is Out. Here Are More Numbers You Need to Know. Think Advisor – Oct. 14, 2024

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Medicare Advantage star ratings 2025—Who are the winners and losers? Fierce Healthcare – Oct. 11, 2024

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Social Security announces 2.5% COLA increase for 2025. Here’s what to know Washington Examiner – Oct. 10, 2024 

Medicare Advantage star ratings dip slightly once again in 2025 Fierce Healthcare – Oct. 10, 2024

US health agency releases 2025 quality ratings for Medicare plans Reuters – Oct. 10, 2024

What Hurricane Milton Means for Social Security Payments Newsweek – Oct. 9, 2024

CMS Increases Scrutiny on Nursing Home Ownership by Seeking Mandatory Medicare Revalidation Skilled Nursing News – Oct. 9, 2024

One Way to Spot Early Cognitive Decline? Medicare Wellness Visits Medpage Today – Oct. 9, 2024

Got a notice of change from your Medicare plan? Here are 3 things to pay attention to USA TODAY – Oct. 8, 2024

Problems With The Medicare Prescription Payment Plan On Medicare.gov? Forbes – Oct. 8, 2024

More Medicare Advantage Beneficiaries Are Filing Appeals for Denied Services or Treatments The Commonwealth Fund – Oct. 8, 2024

Company Behind Major Social Security Number Leak Files for Bankruptcy PCMag – Oct. 8, 2024

How can I protect my social security number from hackers and scams? News Nation – Oct. 8, 2024

Medicare shake-up sends Humana stock down 23% in a week for its worst drop since 2009 Market Insider – Oct. 4, 2024

Mayo Clinic tells hundreds of Medicare Advantage patients to obtain new insurance to keep getting care The Minneapolis Star Tribune – Oct. 4 2024

Federal government may be paying twice for care of veterans enrolled in Medicare Advantage plans Brown University – Oct. 4, 2024

Social Security chief Martin O’Malley clears up myths, bemoans staffing levels and more USA TODAY NETWORK – Oct. 4, 2024

6 Critical Changes You Can’t Afford to Miss in Your New Medicare Advantage Letter Investopedia – Oct. 3, 2024

CMS faces another star ratings lawsuit, this time from UnitedHealthcare Fierce Healthcare – Oct.3, 2024

Taking care of the caregivers. New Medicare pilot project rethinks paying for dementia care. New Hampshire Bulletin – Oct.3, 2024

UnitedHealthcare Adds Deductibles to Medicare Part D for 2025  Managed Health Care – Oct. 3, 2024

2025 Medicare Part D Drug Plan Premiums: Under Control But In Flux Forbes – Oct. 2, 2024

Medicare Advantage giant Humana reels after ratings cut The Washington Post – Oct. 2, 2024 

Medicare Downgrades Humana Plan Over Quality. Time to Shop Around?Barron’s – Oct. 2, 2024

US Medicare issues updated rules for second round of drug negotiations Reuters – Oct. 2, 2024 

Don’t Ignore the Letter You Just Got From Your Medicare Part D Provider Investopedia – Oct. 2, 2024

Health insurers unveil Medicare Advantage plans for 2025 Reuters – Oct. 1, 2024

For 2025, Insurers Pull Back Slightly On Medicare Advantage Footprints Forbes – Oct. 1, 2024

UnitedHealthcare 2025 Medicare Advantage Plans Deliver Choice, Stability Press Release – Oct. 1, 2024

Aetna Updates MA and Drug Programs for Medicare in 2025 Managed Healthcare – Oct. 1. 2024

With Medicare’s annual enrollment period 2 weeks away, here’s what major payers will have on offer Fierce Healthcare – Oct. 1, 2024

Are Online Discount Websites Helping Medicare Beneficiaries? The Commonwealth Fund – Oct. 1, 2024

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National Retiree Legislative Network
Based in Washington, D.C., the National Retiree Legislative Network (NRLN) is the only nationwide organization solely dedicated to representing the interests of retirees and future retirees. Formed in 2002, the NRLN’s endeavors to secure federal legislation to protect retirees’ employer-sponsored pensions and benefits in addition to keeping Social Security and Medicare strong.

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