Medicare Advantage economics

[spinner1001]

Medicare Advantage plans with lots of free benefits have been too good to be true. Now the business shake out is happening from MA plans to MA providers.

Note: This story does not relate to traditional Medicare.

[tophcfa]

Medicare Advantage plans with lots of free benefits have been too good to be true. Now the business shake out is happening from MA plans to MA providers.

Note: This story does not relate to traditional Medicare.

Totally not surprising, nothing that appears too good to be true lasts. It is doubtful future plans will be as good for the policyholders, but they should at least be better for the taxpayers. If we were in a MA plan, I would review the policy changes very closely during the annual enrollment period.

[MX rider]

Totally not surprising, nothing that appears too good to be true lasts. It is doubtful future plans will be as good for the policyholders, but they should at least be better for the taxpayers. If we were in a MA plan, I would review the policy changes very closely during the annual enrollment period.

We've been on UHC Advantage for a few years now and really like it. But we're curious to see what the plan looks like this fall when it's time to renew. Hopefully they keep the wellness benefits, dental and vision.

But time will tell, hopefully we'll have other MA options if needed.

We did our research when we started on medicare, so we''ll just do it again.

[Rainger99]

The article stated that Humana is projecting a loss of as many as 500,000 members from its plans sold directly to seniors.

I will be taking a hard look this fall to see if the MA plans are taking away the advantages.

If Medicare Advantage takes away the advantages, it will be hard for them to stay in business.

[tophcfa]

We've been on UHC Advantage for a few years now and really like it. But we're curious to see what the plan looks like this fall when it's time to renew. Hopefully they keep the wellness benefits, dental and vision.

But time will tell, hopefully we'll have other MA options if needed.

We did our research when we started on medicare, so we''ll just do it again.

You seem very well researched, so you probably already know this. If you are healthy, with no preexisting conditions, you still have an opportunity to switch to a Medigap plan during open enrollment without having to worry about being denied through the medical underwriting process. As we all age, you never know when that window of opportunity will suddenly get slammed shut.

[Rainger99]

Interesting study on prior authorizations.

Medicare Advantage Insurers Made Nearly 50 Million Prior Authorization Determinations in 2023 | KFF (https://www.kff.org/medicare/issue-brief/nearly-50-million-prior-authorization-requests-were-sent-to-medicare-advantage-insurers-in-2023/)

Key points

Medicare Advantage insurers made nearly 50 million prior authorization determinations in 2023

In 2023, insurers fully or partially denied 3.2 million prior authorization requests, which is a somewhat smaller share (6.4%) of all requests than in 2022 (7.4%)

A small share of denied prior authorization requests was appealed in Medicare Advantage (11.7% in 2023)

Though a small share of prior authorization denials were appealed to Medicare Advantage insurers, most appeals (81.7%) were partially or fully overturned in 2023. That compares to less than one-third (29%) of appeals overturned in traditional Medicare in 2022.

[Aces4]

Interesting study on prior authorizations.

Medicare Advantage Insurers Made Nearly 50 Million Prior Authorization Determinations in 2023 | KFF (https://www.kff.org/medicare/issue-brief/nearly-50-million-prior-authorization-requests-were-sent-to-medicare-advantage-insurers-in-2023/)

Key points

Medicare Advantage insurers made nearly 50 million prior authorization determinations in 2023

In 2023, insurers fully or partially denied 3.2 million prior authorization requests, which is a somewhat smaller share (6.4%) of all requests than in 2022 (7.4%)

A small share of denied prior authorization requests was appealed in Medicare Advantage (11.7% in 2023)

Though a small share of prior authorization denials were appealed to Medicare Advantage insurers, most appeals (81.7%) were partially or fully overturned in 2023. That compares to less than one-third (29%) of appeals overturned in traditional Medicare in 2022.

I fully believe fewer procedures are offered/provided to MA recipients. That would account for authorization denial numbers, patients were probably critical in the first place.

[BrianL99]

If you are healthy, with no preexisting conditions, you still have an opportunity to switch to a Medigap plan during open enrollment without having to worry about being denied through the medical underwriting process.


I don't have a clue what the underwriting standards are, but the % of Medicare Eligible people with "no pre-existing conditions", is miniscule.

[OrangeBlossomBaby]

Totally not surprising, nothing that appears too good to be true lasts. It is doubtful future plans will be as good for the policyholders, but they should at least be better for the taxpayers. If we were in a MA plan, I would review the policy changes very closely during the annual enrollment period.

The policyholders ARE taxpayers.

If health insurance was required to be non-profit, instead of commercial profit-making corporations, premiums would be lower, coverage would be higher, and taxpayers wouldn't need to pay so much for the benefit. Sadly though, whenever someone brings up the concept, someone else screams "socialism!" and everyone loses. Except shareholders and the CEO.

[spinner1001]

The policyholders ARE taxpayers.

If health insurance was required to be non-profit, instead of commercial profit-making corporations, premiums would be lower, coverage would be higher, and taxpayers wouldn't need to pay so much for the benefit. Sadly though, whenever someone brings up the concept, someone else screams "socialism!" and everyone loses. Except shareholders and the CEO.

You forgot much less efficient and run by the federal government.

[Stu from NYC]

You forgot much less efficient and run by the federal government.

People forget how inefficient socialism is.

[tophcfa]

The policyholders ARE taxpayers.

If health insurance was required to be non-profit, instead of commercial profit-making corporations, premiums would be lower, coverage would be higher, and taxpayers wouldn't need to pay so much for the benefit.

Yes, Medicare policyholders are indeed taxpayers, or at least they should be or they would be on Medicaid. The point is, Medicare Advantage policyholders cost the taxpayers 22% more per policyholder than Medicare policyholders that go the supplement plan option. So the point that MA plans are not good for taxpayers is valid. And yes, traditional Medicare, with a supplemental plan, is much closer to being non profit than the Medicare Advantage option, which is run by private insurance companies optimizing the inefficiencies of the government. With traditional Medicare and the supplemental option, premiums are typically not lower, but the coverage is significantly higher and the taxpayers supporting that option are not getting screwed nearly as hard.

So in summary, your points listed above are all valid except for the lower premiums argument. With the government option, premiums are higher, because the government isn’t getting screwed by private insurance companies driving costs up by 22% more per policyholder. That’s why the Medicare Advantage experiment is failing miserably for taxpayers, and changes will be necessary. The whole train wreck happening with the Villages Health will be the poster child for these changes that will be a coming. Stay tuned.

[rsmurano]

No corporations or businesses should be non-profit, every corporation needs capital and shareholders provide this money and these shareholders need to get reimbursed.
Not sure if people realize this but you will not get anywhere in life without investing your money during your working years, and a good portion of it, I put away 60% of our paychecks in stocks/401k’s.
Receiving a paycheck will only get you so far and nowhere in your retirement years.

[USOTR]

We've been using Humana and been very pleased with it.

[elle123]

Medicare Advantage plans with lots of free benefits have been too good to be true. Now the business shake out is happening from MA plans to MA providers.

Note: This story does not relate to traditional Medicare.
Doesn't The Villages developers specialize in "Advantage Medicare?" :) I heard they made a killing...

[spinner1001]

Doesn't The Villages developers specialize in "Advantage Medicare?" :) I heard they made a killing...

Do you mean The Villages Health, the business in bankruptcy? I guess ‘killing’ has a different meaning here.

[MX rider]

Yes, Medicare policyholders are indeed taxpayers, or at least they should be or they would be on Medicaid. The point is, Medicare Advantage policyholders cost the taxpayers 22% more per policyholder than Medicare policyholders that go the supplement plan option. So the point that MA plans are not good for taxpayers is valid. And yes, traditional Medicare, with a supplemental plan, is much closer to being non profit than the Medicare Advantage option, which is run by private insurance companies optimizing the inefficiencies of the government. With traditional Medicare and the supplemental option, premiums are typically not lower, but the coverage is significantly higher and the taxpayers supporting that option are not getting screwed nearly as hard.

So in summary, your points listed above are all valid except for the lower premiums argument. With the government option, premiums are higher, because the government isn’t getting screwed by private insurance companies driving costs up by 22% more per policyholder. That’s why the Medicare Advantage experiment is failing miserably for taxpayers, and changes will be necessary. The whole train wreck happening with the Villages Health will be the poster child for these changes that will be a coming. Stay tuned.

We will see.
MA plan providers are still making lots of money, just not as much as they were. We'll find out soon, as the renewal period is coming up.
We like our UHC plan, so we're hoping we don't have to switch. But if we do, it is what it is.
Life goes on.

[RoboVil]

The article stated that Humana is projecting a loss of as many as 500,000 members from its plans sold directly to seniors.

I will be taking a hard look this fall to see if the MA plans are taking away the advantages.

If Medicare Advantage takes away the advantages, it will be hard for them to stay in business.
Medicare Advantage plans have you locked in. You cannot go from a Medicare Advantage plan back to regular Medicare in most cases. Good luck.

[Birdrm]

It would make sense for the MA plans to try to cut costs, since most are zero dollar I wonder if they might start charging for extras like gym memberships, dental and vision?

[biker1]

It depends on each person's medical history. You do have to pass underwriting to move from a Medicare Advantage plan to Medicare with a Supplemental. One of the advantages of selecting Medicare with a Supplemental Plan when you first become eligible is that you are unconditionally accepted. I believe you can make a change during your first year without underwriting. You used the word "most"; this means more than half. I would not be surprised if more than half the people on Medicare Advantage plans would fail underwriting if they tried to switch to Medicare with a Supplemental. There are a few states in the northeast that disallow the underwriting requirement.

Medicare Advantage plans have you locked in. You cannot go from a Medicare Advantage plan back to regular Medicare in most cases. Good luck.

[Mrprez]

Medicare Advantage plans have you locked in. You cannot go from a Medicare Advantage plan back to regular Medicare in most cases. Good luck.

Not true at all.

[jimjamuser]

Yes, Medicare policyholders are indeed taxpayers, or at least they should be or they would be on Medicaid. The point is, Medicare Advantage policyholders cost the taxpayers 22% more per policyholder than Medicare policyholders that go the supplement plan option. So the point that MA plans are not good for taxpayers is valid. And yes, traditional Medicare, with a supplemental plan, is much closer to being non profit than the Medicare Advantage option, which is run by private insurance companies optimizing the inefficiencies of the government. With traditional Medicare and the supplemental option, premiums are typically not lower, but the coverage is significantly higher and the taxpayers supporting that option are not getting screwed nearly as hard.

So in summary, your points listed above are all valid except for the lower premiums argument. With the government option, premiums are higher, because the government isn’t getting screwed by private insurance companies driving costs up by 22% more per policyholder. That’s why the Medicare Advantage experiment is failing miserably for taxpayers, and changes will be necessary. The whole train wreck happening with the Villages Health will be the poster child for these changes that will be a coming. Stay tuned.
Agreed. Great post !

[Dexterconfetti]

Up here in suburban Philly, my large cardiac group is no longer accepting Medicare Advantage insurance. I have a “regular” Medicare Supplement Plan, so I am totally covered.

Just a warning for the future… remember these plans will be with you for the rest of your life.

[Mrprez]

Just a warning for the future… remember these plans will be with you for the rest of your life.

Want to post a link to an official website that supports your statement?

[jimjamuser]

Medicare Advantage plans with lots of free benefits have been too good to be true. Now the business shake out is happening from MA plans to MA providers.

Note: This story does not relate to traditional Medicare.
Isn't there a famous saying that if something seems too good to be true.........it probably isn't ?

[Rainger99]

Up here in suburban Philly, my large cardiac group is no longer accepting Medicare Advantage insurance. I have a “regular” Medicare Supplement Plan, so I am totally covered.

Just a warning for the future… remember these plans will be with you for the rest of your life.

That isn't true. As far as I can tell, if you are in fairly good health, you shouldn't have any problem dropping advantage and going to traditional medicare.
If any people have had difficulty switching to TM, please post.


The list of potentially deniable medical conditions includes Alzheimer’s disease, asthma, cancer, congestive heart disease, diabetes with complications, end-stage renal disease (ESRD), high blood pressure, limitations of daily activities, stroke and other conditions, based on KFF’s review of Medigap applications of leading insurers. Applicants may also be charged higher Medigap premiums if they have conditions such as diabetes with no complications, bipolar disorder, or osteoporosis that is treated with infusion. The Affordable Care Act prohibits insurance companies from denying coverage or charging higher premiums based on pre-existing conditions, but does not apply to Medigap insurers.

[HarleyDoc]

As others have said, when it seems too good to be true it usually is. United Health hare Group stock price has fallen by over one half in the past year. The estimated profits are way less since it is costing more than the company estimated to care for MA patients. A new CEO was installed to help prevent the slide in stock price. It will be interesting to see what MA plans look like over the next 3 years.

[Mrprez]

I am all for rooting out waste, fraud, and abuse in all government programs including Medicare and social security. The future for MA plans is expected to skyrocket, not go away. Will there be changes? No doubt. Going away? Nope.

[midiwiz]

We've been on UHC Advantage for a few years now and really like it. But we're curious to see what the plan looks like this fall when it's time to renew. Hopefully they keep the wellness benefits, dental and vision.

But time will tell, hopefully we'll have other MA options if needed.

We did our research when we started on medicare, so we''ll just do it again.

it would depend on how you fell into it, I also have UHC advantage PPO that my company custom designed, changes have been very little, and I expect it to stay that way

[MX rider]

it would depend on how you fell into it, I also have UHC advantage PPO that my company custom designed, changes have been very little, and I expect it to stay that way

Well, we didn't really "fall into it". We signed up when we retired and started on medicare. Hopefully our benefits don't change much, but if they do we'll deal with it. We're not losing sleep over it.

[Rainger99]

Medicare Advantage plans are scaling back.

MA plans can offer these additional benefits, often without charging an additional premium for Part D prescription drugs or supplemental benefits, because in 2025, they received an additional $2,255 per enrollee above their estimated costs of providing Medicare-covered services.

That explains how Advantage Plans pay for all of the extras.

Medicare Advantage plans are scaling back (https://finance.yahoo.com/news/medicare-advantage-plans-are-scaling-back-090008599.html)

[Aces4]

Medicare Advantage plans are scaling back.

MA plans can offer these additional benefits, often without charging an additional premium for Part D prescription drugs or supplemental benefits, because in 2025, they received an additional $2,255 per enrollee above their estimated costs of providing Medicare-covered services.

That explains how Advantage Plans pay for all of the extras.

Medicare Advantage plans are scaling back (https://finance.yahoo.com/news/medicare-advantage-plans-are-scaling-back-090008599.html)

And that is the poop hitting the fan that was predicted in earlier threads on this forum. It was nice while it lasted but not self-sustaining. The screaming high insurance costs are balanced on the non-paying population that doesn't have to worry about their healthcare.

[GoRedSox!]

While the pandemic seems like a distant memory in some ways, it wasn’t that long ago. During this time, elective procedures such as knees, hips, shoulders, etc. were often postponed. This created a domino effect and backlogged a lot of these procedures which got pushed forward. It appears in some cases that insurance underwriters underestimated costs and insurers like Humana and United Health did not make anywhere near as much on MA members as they projected. Some members became unprofitable. Now insurers are pulling out of unprofitable zip codes and shedding members, and cutting back on extra benefits or raising premiums for others. I hope the 2026 MA plans won’t lose too much in The Villages, this has to be one of the healthiest senior populations in the country.

[Publius]

Well, Medicare Advantage (MA) differs greatly among carriers like any open publicly traded contract. Big difference in standard coverage versus chronic illnesses like prescribed diabetes, lung disorders etc. Humana has cut their standard and chronic illnesses compensations. They do alot of expensive retail advertising, which cuts into their margins. What most people don't realize is that MA contracts have a monthly stipend/member from the government whether the individual uses expensive health care or not. Hence, the government pays monthly for each MA covered person enrolled to the carriers no matter if they cause expenses or not. Therefore, keeping each member healthy without expensive procedures benefits the carriers profits. Sure, it's a test program. However, it boosts DIY and primary care physicians to work harder to stay/keep individuals healthy. One must know caveat: under ANY MA contract the owner must have their primary care physician (PCP) acquire and get approved a pre-authorization from the MA contractor for any procedure outside the PCP's annual check ups. It's quite demanding at certain points, but can save enrollees hugely by following the rules. As always, doing one's homework can save (in our case) millions of dollars in life saving health care only Florida best in world medical facilities can provide!
Bon Chance, readers. Much to learn. More to share...
Yours In Service,
Publius

[Publius]

Medicare Advantage plans are scaling back.

MA plans can offer these additional benefits, often without charging an additional premium for Part D prescription drugs or supplemental benefits, because in 2025, they received an additional $2,255 per enrollee above their estimated costs of providing Medicare-covered services.

That explains how Advantage Plans pay for all of the extras.

Medicare Advantage plans are scaling back (https://finance.yahoo.com/news/medicare-advantage-plans-are-scaling-back-090008599.html)
Well, Rainger99, while I didn't find quite the same $/member/month of any MA contract at $2,255, it does fit towards the per member monthly numbers loosely fit with government stated possibilities. The main point is: contracted MA Healthcare is prosperous IF each enrollee is kept healthy! That makes good monetary sense on any level of capitalistic venture. Plus great health in aging population here in Central Florida.

[Rainger99]

Well, Rainger99, while I didn't find quite the same $/member/month of any MA contract at $2,255, it does fit towards the per member monthly numbers loosely fit with government stated possibilities. The main point is: contracted MA Healthcare is prosperous IF each enrollee is kept healthy! That makes good monetary sense on any level of capitalistic venture. Plus great health in aging population here in Central Florida.

This is the estimate from AI.

Thus, the 22% overpayment equates to roughly $2,860 per patient annually. This is an estimate, as actual payments vary by county, risk scores, and plan specifics.