As Medicare Advantage plans change, patients are caught in middle

Edward Dailey, 81, said he has long viewed the Medicare Advantage plan he gets through Blue Cross Blue Shield as a bargain. But now, he said, the premium is jumping nearly 25 percent to $108 per month from $87 (on top of the 2025 premium of $185 a month that all Medicare users pay to the program).

In addition, some benefits that Dailey’s plan included have been pared, including a reduction in dental coverage.

Dailey, who was the Blue Cross general counsel until 1995, said the sharp increase and reduced benefits persuaded him to shop around. But he found other Medicare Advantage plans had even higher premiums.

“They’re all going up considerably,” Dailey said.

For 2026, Point32Health, the parent organization of Harvard Pilgrim and Tufts Health Plan and the state’s largest Medicare Advantage provider, has eliminated its zero dollar preferred provider network plan, or PPO, which gives people greater choices of doctors, and consolidated two premium-free HMO plans into one. Blue Cross Blue Shield eliminated its zero dollar premium plan and replaced it with one that charges $56 a month.

The financial pressures are also disrupting patient care. Both Blue Cross and UnitedHealthcare have dropped primary care physicians at Mass General Brigham from their Medicare Advantage networks, meaning patients can find new doctors, find new insurance, or pay higher out-of-pocket costs.

Blue Cross has dropped primary care doctors at Beth Israel Lahey Health from its Medicare Advantage PPO plan. Neither the insurers nor the health systems have specified the reasons for the breakups. But policy analysts say it was inevitably about money and the reimbursements insurers were willing to pay and health systems willing to accept.

“They’re one manifestation of continuing friction between payers and caregivers as each jockeys for either higher payment or lower outlays,” said Alan Sager, a health law, policy and management professor at Boston University School of Public Health.

As recently as 2021, Blue Cross Blue Shield of Massachusetts earned $3.6 million from its Medicare Advantage offerings. Last year, the insurer lost $113 million on the plans and expects to lose $185 million this year.

“The entire industry is going through this disruption,” said Krista Bowers, senior vice president of government programs for Blue Cross.

Insurers still in the Massachusetts market say they offer plenty of options for Medicare Advantage customers. Blue Cross, for example, says it will offer three Medicare Advantage PPO and four HMO plans in Massachusetts next year. UnitedHealthcare says nearly all of its individual Medicare Advantage members will have access to the same plans in 2026.

But insurers nationwide project that Medicare Advantage enrollment will slip next year to about 34 million from 34.9 million in 2025, the first decline in years, according to the Centers for Medicare and Medicaid Services. The share of Medicare patients in Medicare Advantage will also slip, to 48 percent from 50 percent in 2025.

Open enrollment runs from Oct. 15 to Dec. 7. What exactly Medicare Advantage will look like in the future is still up for debate.

Medicare Advantage, originally called Medicare+Choice, was created in 1997 and became popular because plans provided one-stop shopping for medical and drug coverage; offered other benefits such as dental, vision, and fitness; and had low or no premiums.

Medicare pays insurers a fixed amount for each person enrolled, and insurers can make money by keeping average care costs lower than that Medicare payment. They also recoup some of their spending through premiums, although many attract new customers with low or no premiums.

Insurers, however, have found it increasingly difficult to control expenses as people live longer, the use of health care services increases, and drug costs soar. Infusion drugs for cancer treatments in particular have increased what insurers spend on Medicare Advantage patients, as advances turn cancer from what was once a short-term death sentence to a chronic condition.

“The revenue and the way [Medicare} reimburses for oncology,” said Bowers, the Blue Cross executive, “has not necessarily caught up to what we’re seeing in the population.”

Insurers are also grappling with changes to the Medicare Advantage payment models. The Inflation Reduction Act, passed under President Biden, changed how drug costs are absorbed by insurers in an effort to lower prices for Medicare users.

Another regulation updated how risk is used to calculate revenue for certain Medicare Advantage plans. For example, the federal government once considered many different diagnoses to assess how sick a patient was, and tailored the monthly payment insurers received according to those assessments. The sicker a patient, the higher the patient’s “risk score,” and the more money the insurer received to manage that patient’s care.

The updated risk modeling eliminated many of the diagnoses that contributed to a risk score, lowering the monthly payment, Blue Cross said.

The Trump administration is increasing federal payments to Medicare Advantage insurers by an estimated $25 billion next year, about a 5 percent increase.

But health care costs have risen faster than that in recent years. In Massachusetts, health care spending grew nearly 9 percent in 2023, the most recent year for which data is available.

Insurers, meanwhile, are reducing their Medicare Advantage footprints as profits shrink. Cigna, one of the nation’s biggest insurers, exited the business earlier this year when it sold its Medicare Advantage unit.

At least six other insurers, including Blue Cross Blue Shield Vermont, are getting out of the Medicare Advantage business next year, according to Modern Healthcare. Last year, WellCare Medicare Advantage, a subsidiary of St. Louis insurer Centene, pulled out of Massachusetts last year, leaving more than 7,000 patients to find a new plan.

As the Medicare Advantage market contracts, it could get increasingly difficult for national insurers to stay in that business, said Michael Barnett, a Brown University professor of health services, policy and practice.

“In the end, what it means is that health care costs continue to climb up and up and up,” Barnett said. “And that’s been a major problem in Massachusetts for a long time.”

Marin Wolf can be reached at marin.wolf@globe.com. Jessica Bartlett can be reached at jessica.bartlett@globe.com. Follow her @ByJessBartlett.