Humana’s Medicare Advantage plans that cover 6 million Americans are set to undergo major changes that will potentially lead to benefit cuts for patients in 2025. The company cited rising healthcare costs as a reason for the adjustments, with the goal of boosting its financial performance. The move is part of a trend among insurers, as several others have also warned that Medicare Advantage payments may not be sufficient to cover increasing costs for hospital and outpatient treatment as more seniors utilize their insurance.
CEO Bruce Broussard acknowledged the challenges faced by Humana and the industry as a whole, with the company heavily reliant on revenue from the federal government’s Medicare Advantage program. As baby boomers become eligible for Medicare and profits diminish, Humana anticipates cuts in benefits and potentially exiting certain markets in 2025. This follows similar struggles faced by UnitedHealth, with CEO Andrew Witty emphasizing the need for stability in the face of reduced funding. The competitive nature of the Medicare Advantage market, combined with inadequate reimbursement rates, is putting pressure on insurers to make difficult decisions.
In response to the financial pressures, Humana and other insurers are considering cutting back on certain benefits like vision, dental, and prescription drug coverage. Mutual of Omaha recently stopped offering standalone Medicare prescription drug plans due to increased costs related to higher paid claims and inflation. The potential impact on retirees on fixed incomes could result in higher out-of-pocket expenses and health consequences if they are unable to access necessary treatment. As seniors prepare for the upcoming Medicare Advantage enrollment period, financial expert Michael Ryan advises staying informed and exploring alternative insurance options if major cuts are forthcoming.
The looming changes in Humana’s Medicare Advantage plans highlight a broader issue within the industry, where insurers are struggling to balance rising healthcare costs with diminishing reimbursement rates. The warnings issued by Humana, UnitedHealth, and other companies indicate a potential industry-wide contraction in supplemental benefits, which could have significant implications for millions of Medicare Advantage recipients. By staying informed and proactive in evaluating their insurance options, seniors can better navigate the evolving landscape and ensure they have access to the healthcare services they need. While the future of Medicare Advantage plans remains uncertain, it is crucial for individuals to prioritize their health and financial well-being when making decisions about their coverage.
