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Medicare Advantage Plans Shift Costs to Seniors in 2027
Confirmed
In Short: Medicare Advantage insurers are raising out-of-pocket costs and cutting benefits for seniors in 2027.
Ryan Langston, an analyst at TD Cowen, noted that Aetna will lose an estimated 950,000 enrollees next year as it withdraws from some states, reducing its presence to 41 states from 43 this year.
Insurers have cited government reimbursement not keeping up with rising medical costs as a reason for these changes. The Centers for Medicare and Medicaid Services expects Medicare Advantage premiums to drop more than 16% to an average of $12 from $14.37.
UnitedHealthcare, Humana, and CVS Health's Aetna manage the largest Medicare Advantage businesses, with UnitedHealthcare leading the pack. Insurers have previously exited less profitable counties due to higher-than-expected medical service use.
Funding pressures, rising medical costs, drug costs, and increased utilization are affecting every part of healthcare, according to UnitedHealth.
Federal data analyzed by STAT and investment firms shows that Medicare Advantage insurers are raising out-of-pocket costs, cutting money for dental work, and eliminating plans with broad networks of hospitals and doctors.
Seniors could face shocks such as discovering their doctor is no longer accepted by their plan if they do not shop carefully during Medicare’s annual enrollment period for 2027 plans, which starts Oct. 15.
People with Medicare Advantage plans may experience a rude awakening next year if they need care or prescriptions.
What this adds
The shift in costs and benefits could lead to significant changes for Medicare Advantage enrollees, potentially affecting their healthcare choices and financial burdens.
What's confirmed
- Ryan Langston, an analyst at TD Cowen, noted that Aetna will lose an estimated 950,000 enrollees next year as it withdraws from some states, reducing its presence to 41 states from 43 this year.
- Insurers have cited government reimbursement not keeping up with rising medical costs as a reason for these changes. The Centers for Medicare and Medicaid Services expects Medicare Advantage premiums to drop more than 16% to an average of $12 from $14.37.
- UnitedHealthcare, Humana, and CVS Health's Aetna manage the largest Medicare Advantage businesses, with UnitedHealthcare leading the pack. Insurers have previously exited less profitable counties due to higher-than-expected medical service use.
- Funding pressures, rising medical costs, drug costs, and increased utilization are affecting every part of healthcare, according to UnitedHealth.
- Federal data analyzed by STAT and investment firms shows that Medicare Advantage insurers are raising out-of-pocket costs, cutting money for dental work, and eliminating plans with broad networks of hospitals and doctors.
- Seniors could face shocks such as discovering their doctor is no longer accepted by their plan if they do not shop carefully during Medicare’s annual enrollment period for 2027 plans, which starts Oct. 15.
- People with Medicare Advantage plans may experience a rude awakening next year if they need care or prescriptions.
What's still developing
- Insurers last year said higher-than-expected use of medical services in their Medicare businesses led to them exit counties that were less profitable. (Reporting by Amina Niasse; Editing by Jonathan Spicer ) Republication or redistribution of Reuters content, including by framing or similar means, is expressly prohibited without the prior written consent of Reuters.
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