The Centers for Medicare and Medicaid Services just announced that the Medicare Advantage insurers are not raising costs or cutting benefits for enrollees in 2025. This should have been expected, given how handsomely the insurers profit from the Medicare Advantage program and how much they want to enroll more members to increase their profits further. But, for months, the insurers spouted lies about 2025 enrollee costs rising and benefits being cut in a vain attempt to secure higher payment rates and boost their already excessive Medicare payments.
You can imagine the resources the insurers invested lobbying for rate increases, as the Centers for Medicare and Medicaid (CMS) was determining how much to increase their Medicare payment rate in 2025. Every year, insurers scare older adults and people with disabilities and lobby Congress heavily in order to pressure the government into overpaying them more. Thankfully, recognizing the $83 billion to $140 billion in overpayments to the MA insurers this year alone, CMS decided to raise MA insurer rates by 3.7 percent in 2025.
It’s no surprise the rate increase–too much in the view of dozens of experts and advocates–did not lead to higher costs for MA enrollees or cuts in their “extra” benefits. People can still choose among a large number of MA plans with no additional monthly premiums. The MA insurers knew they had to keep upfront costs down and deliver extra benefits in order to increase their enrollee ranks and their profits. And, while that sounds good, it’s not possible for people to know whether the plan they choose will cover the care they need or offers a lot of nothing.
The surprise will come to those people enrolled in MA plans who develop a serious condition and cannot see the specialists they want to see or can’t get approval for the care they need. Narrow provider networks and high denial rates continue to be the M.O. for many MA plans. The “extra” dental, vision and hearing benefits are the sweetener; little do enrollees know how hard it can be in many MA plans to find providers to deliver these benefits to them or how high their out-of-pocket costs can be even with some coverage.
If you can get a low-cost Medicare supplemental insurance plan, seriously consider enrolling in Traditional Medicare, where you can choose your physicians and hospitals and get the care you need when you need it, without administrative hurdles. MA plans would be a fine option if: 1. The insurers did not have a strong financial incentive to avoid providing costly care to people with complex conditions; 2. Enrollees could meaningfully compare MA plans and avoid the bad actors; and 3. The government could kick out the worst actors. Sadly, that is not the case.
Here’s more from Just Care:
- Medicare Advantage plans get $16 billion increase in 2025
- 33 experts call on CMS to continue reining in Medicare Advantage overpayments
- How will the administration address Medicare Advantage overpayments in 2025?
- The government overpays insurers offering Medicare Advantage as much as $140 billion in 2023
- Five things to think about when choosing between traditional Medicare and a Medicare Advantage plan
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