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A key lobbying group for Medicare Advantage insurers is sounding the alarm over care disruptions from increasingly hostile government regulations — despite the Biden administration’s predictions of market stability next year.

Insurers will offer fewer MA plans nationwide in 2025 and have on average increased the financial burden on seniors while valuing the additional benefits so popular in the privatized Medicare program, according to an analysis of CMS data by Avalere for the account of the Alliance for Better Medicare. The results mirror those of other research groups.

Insurers have been forced to take these measures due to stricter government policies, including reductions in payments, the BMA said.

“Seniors are choosing Medicare Advantage in record numbers because the program works. But recent policy changes leave them with fewer choices, higher costs and reduced benefits,” BMA CEO Mary Beth Donahue said in a statement.

The BMA’s analysis echoes a chorus of disappointment from other insurer groups, including industry giant AHIP, following the CMS’s release of data on 2025 plans last month. According to lobbies, Washington is to blame for the fact that insurers will offer fewer benefits to MA seniors next year.

However, this view ignores a host of other factors that have coalesced over the past year and a half to threaten once exorbitant reimbursement for MA plans.

Regulatory changes are part of the picture, but they are not the only culprits. Most notably, starting last year, older adults began relying more on health care than insurers’ actuaries predicted, leading to higher medical costs and shrinking profit margins.

As a result, some of the program’s largest insurers, including UnitedHealthcareCVS’s Humana and Aetna told investors they would cut benefits and eliminate underperforming plans, potentially preferring to sacrifice member growth over profits.

Market watchers feared the cuts would be drastic. Yet, according to CMS data, the number of MA plans nationwide is only decreasing by 2.8%. As a result, nearly 2 million existing beneficiaries could have to choose a new plan, or about 7% of MA enrollees, according to an ATI Advisory analysis cited by the BMA. This is a notable increase from the 1.5% average of previous years, although it is still small.

Meanwhile, the key supplemental benefits that underpin MA plans – vision, dental and hearing – remain relatively stable and telehealth offerings have actually expanded for next year. The average MA enrollee will also have lower premiums, with an average premium of $17 in 2025 compared to $18.23 in 2024.

Instead, plans have chosen to cut benefits with a less direct impact on health – benefits that they have significantly expanded in recent years to attract more seniors to their coverage. Plans offering over-the-counter benefits, for example, will decline from 86% this year to 73% next year, the largest decline among all benefits studied.

OTC benefits, including prepaid debit cards, are a good area for plan reductions because they do not take into account government limits on the extent to which payers can reduce benefits from year to year, according to experts. However, they’re also one of the most popular added benefits among seniors, so reducing OTC coverage can be a gamble.

According to an analysis by investment bank TD Cowen, Aetna and CVS’s Humana made the largest cuts to OTCs, while UnitedHealthcare — the largest MA payer in the United States — avoided cutting benefits.

Plans have also chosen to increase maximum spending limits for seniors, which could impose higher costs on beneficiaries. Next year, 93.7% of schemes have repayment thresholds below the maximum allowed by the government, compared to 97.4% in 2024, the BMA found.

“As policymakers consider policy and payment changes for 2026, the stability of the Medicare Advantage program is critical to minimizing further disruptions and preventing unintended consequences for beneficiaries,” the group’s report said.