The Medicare Advantage shopping season comes with a dose of confusion and some political implications

Reduced benefits and insurance changes await many older Americans purchasing health insurance this fall. That’s if their plan is still available in 2025.

More than a million people will likely have to find new insurance as major insurers cut costs and withdraw from markets for Medicare Advantage plans, the private version of the government insurance program aimed primarily at people 65 and older.

Industry experts also anticipate some price increases for Medicare prescription drug plans as coverage improvements are required.

Voters will learn about the insurance changes in the weeks before the next president is elected and as Democrat Kamala Harris campaigns on promises to lower health care costs. Early voting has already begun in some states.

“This could be bad news for Vice President Harris. “If that premium is going up, it’s a very obvious sign that you’re paying more,” said Massey Whorley, an analyst at health care consulting firm Avalere. “This has a significant impact on how they view the work of the current administration.”

Insurance agents say the distraction from the election adds another complication to an already difficult annual registration window that begins next month.

Insurers are withdrawing from Medicare Advantage

According to the federal government, Medicare Advantage plans will cover more than 35 million people next year, or about half of all people enrolled in Medicare. Insurance agents say they expect more people than usual will need to find new coverage for 2025 because their insurer has either terminated the plan or left their market.

Health insurer Humana expects the withdrawal of Medicare Advantage plans from locations nationwide to impact more than half a million customers – about 10% of its total customer base. Many customers will be able to switch to other Humana plans, but company leaders still expect to lose several hundred thousand customers.

CVS Health’s Aetna anticipates a similar loss, and other large insurers have said they are leaving several states.

Insurers say rising costs and use of care, as well as reductions in government reimbursement, are forcing them to pull back.

Some may expect a difficult search

When insurers leave Medicare Advantage marketplaces, they typically stop selling plans with lower quality ratings and plans with a higher percentage of Black buyers, according to Dr. Amal Trivedi, a public health researcher at Brown University.

He noted that exiting the market can be particularly difficult for people with multiple doctors and for patients with cognitive problems such as dementia.

Most markets will still have dozens of plans to choose from. However, finding a new option requires understanding the out-of-pocket costs of each choice, as well as determining how doctors and regular prescriptions cover treatment costs.

“People don’t like change when it comes to health insurance because they don’t know what’s on the other side of the fence,” said Tricia Neuman, a Medicare expert at KFF, a nonprofit health care research organization.

Plans that don’t leave the marketplaces can increase deductibles and limit benefits, such as cards used to pay for utilities or food.

They have proven popular in recent years as inflation rises, says Danielle Roberts, co-founder of Boomer Benefits, an insurance agency in Fort Worth, Texas.

“It’s really hard for a person on a fixed income to choose a health plan for the right reasons… when $900 on a flex card for free purchases sounds pretty good,” she said.

Don’t “sleep” when choosing a Medicare plan

Prices may also increase for some so-called stand-alone Part D prescription drug plans that people bundle with traditional Medicare insurance. KFF reports that the population is over 13 million people.

The Centers for Medicare and Medicaid Services said Friday that premiums for these plans will drop by an average of about 4% to $40 next year.

However, brokers and agents say premiums can vary significantly and they still expect some increases. They also expect fewer choices about plans and changes to formularies or lists of covered drugs. Roberts said she has already seen premium increases of $30 or more under some plans for next year.

Any price change will hit a customer base known to switch plans for premium changes as low as $1, said Fran Soistman, CEO of online insurance marketplace eHealth.

Changes are implemented once a congressionally approved coverage change takes effect. Most importantly, out-of-pocket drug spending will be capped at $2,000 for people on Medicare, an initiative by Democrats and President Joe Biden in 2022.

In the long run, these changes will lead to “much richer benefits,” Whorley said.

KFF’s Neuman noted that reducing drug costs will be especially helpful for cancer patients and others who rely on expensive prescription drugs. He estimates that approximately 1.5 million people will benefit from it.

To prevent large premium spikes caused by the changes, the Biden administration will take billions of dollars from the Medicare trust fund to pay insurers to keep premium prices low, a move criticized by some Republicans. Insurers will not be able to raise premium prices above $35 next year.

Customers will be able to sign up for insurance for 2025 between October 15 and December 7. Experts say all the potential changes mean buyers need to carefully review any new choices or coverage they plan to renew.

“This is not the year to sleep on it, just re-enroll in the status quo,” said Whorley, the health care analyst.

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