Medicare Advantage Plan Cancelled? What To Do Now.

As open enrollment kicks off this year, insurance providers are releasing their plans for the upcoming 2025 year. As the plans are announced, many Medicare Advantage beneficiaries are finding that their plan is no longer to be offered. In fact, some providers are pulling out of certain areas entirely. If you are one of those losing coverage, you have a couple options available to you. Let’s explore why exactly this is happening, and how best to handle your plan being cancelled.

Why Are Plans Being discontinued?

This year, over 1 million Medicare beneficiaries will have to shop for new health insurance. Many insurers are pulling their Medicare Advantage plans from counties, and even states. This is referred to as a Plan Exit. This is due to a variety of reasons, all of which boil down to being deemed unprofitable.

Insurance providers have had to face a significant number of changes this year. These changes apply financial and regulatory pressures on the providers. In some cases, these pressures can force a provider out of an area. Some of these changes include:

• The impact of the new Medicare Part D rules. Beginning in 2025, all Medicare Part D plans will be required to allow enrollees the option to pay drug costs in the form of capped monthly payments. Additionally, all out-of-pocket costs are capped to a maximum of $2,000 for Part D plans. The Inflation Reduction Act is requiring CMS to establish a manufacturer discount program.
• Medical inflation. Individual medical costs are expected to hit their highest by 2025.
• Lower reimbursements from the government. CMS has finalized lower reimbursement rates for both hospitals and physicians in 2025. Physicians are receiving a total of $1.8 billion less in funding, and for hospitals, the total is $2.2 billion.
• The Inflation Reduction Act. While having great positive impact on US citizens, such as more affordable insulin and vaccines, costs go up for insurance providers.

Plan exits aren’t new. However, this year expects a lot more plan exits than an average year. In addition to the above, some blame the problem partially on COVID. With some lingering effects and complications from COVID, people are utilizing their insurance more often. On top of this, there are cases of major conditions that could have been prevented if COVID had not restricted access to care.

What should I do if I am impacted by a Plan Exit?

If you receive or received a notice about the discontinuation of your Medicare Advantage plan, you have options. To start, you are guaranteed to move into another Medicare Advantage plan, if one is available and you choose to. You also have the option to defer back to Original Medicare. If you do, you can get a Medicare Supplement. In fact, this is the best time to enroll in a Medicare supplement plan.

Typically, you have a guaranteed issue period, during which you can apply for Medicare Supplement without health underwriting. If you miss this period, a health underwriting is required. This is to determine your eligibility and premiums. It can also make it very difficult for people with medical conditions to be accepted on a Medicare Supplement plan. However, if your plan is discontinued, you can enroll in Medicare supplement without health underwriting.

For both Medicare Advantage and Medicare Supplement, you can enroll with any company and they have to accept you.

Any seniors who find their Medicare Advantage plans going away, we encourage you to explore your options. Furthermore, we recommend all seniors review their plan and compare it against other plans. There are plenty of good plans out there, and there may be a better fit for you.

As always, if you find yourself in need of advice, reach out to one of our licensed Medicare Advocates. We are focused on your health needs, and will work tirelessly to get you the right plan for you!