NEW YORK >> Americans enrolled in Medicare Advantage health plans should expect to see fewer extra benefits like gym memberships and vision and dental coverage next year, investors and industry experts say.<\/p>\n
The U.S. government said earlier this month it would raise 2027 payments to insurers managing Medicare Advantage plans for people aged 65 and older or with disabilities by 2.48% on average. Dr. Mehmet Oz, head of the Centers for Medicare & Medicaid Services, has aimed to cut federal health plan spending.<\/p>\n
Insurance executives in recent weeks have said those rates, while higher than first proposed, are not good enough. On Wednesday, Humana flagged it would need to cut benefits.<\/p>\n
Added services, including coverage of vision, hearing, dental, fitness programs, meals and transportation assistance, have helped entice half of the 70 million people on Medicare into managed care plans instead of the government\u2019s standard fee-for-service-based program.<\/p>\n
Cutting some benefits, as well as exiting certain regions or states, could shield Humana and its rivals, including UnitedHealth Group\u2019s UnitedHealthcare and CVS Health\u2019s Aetna, from added costs, five investors said.<\/p>\n
Medicare Advantage plans account for 80%, 33% and 12% of revenue for Humana, Aetna and UnitedHealthcare, respectively.<\/p>\n
Don’t miss out on what’s happening!<\/strong><\/p>\n Stay in touch with breaking news, as it happens, conveniently in your email inbox. It’s FREE!<\/p>\n \u201cAll insurers are likely to cut back on benefits, but Humana will be cutting back the most,\u201d said Kevin Gade, chief operating officer at Bahl and Gaynor.<\/p>\n Cutting those benefits encourages costly members with higher rates of medical needs to seek other plans, Gade said.<\/p>\n \u201cAetna continues to offer quality insurance coverage in a manner that is sustainable for our clients and our business,\u201d said a CVS Health spokesperson. UnitedHealth declined to comment.<\/p>\n Humana CEO Jim Rechtin, on a Wednesday call with analysts and investors, said the company would have to make the cuts to reach profit targets, but that it would try to retain what is most important to its members.<\/p>\n \u201cWe will adjust benefits to remain on track to deliver our 2028 commitment of returning to a sustainable margin of at least 3%,\u201d said Rechtin.<\/p>\n Bobby Hunter, UnitedHealthcare\u2019s head of government programs, earlier this month said funding for its Medicare Advantage business is still below what it expects for 2027, but he did not flag benefit cuts.<\/p>\n A spokesperson for AHIP, an insurance industry trade group, said: \u201cAs health plans incorporate recently released policies, they will continue to focus on keeping coverage and care as affordable as possible.\u201d<\/p>\n Morningstar analyst Julie Utterback said Humana has been offering more benefits in its 2026 plans than rivals.<\/p>\n \u201cPotential benefit changes in 2027 may just be a matter of leveling the playing field for Humana relative to peers,\u201d Utterback said.<\/p>\n Medicare Advantage insurers often wait until June to announce changes to plans, she said. Based on UnitedHealth\u2019s recent comments, Utterback said, changes are \u201cnot out of the question.\u201d<\/p>\n Investors said Medicare Advantage companies would be set apart by their quality, or \u201cStar\u201d ratings, which determine bonus payments and improve profitability.<\/p>\n \u201cYou have to be very particular within managed healthcare right now, especially companies with high government exposure and average \u2018Star\u2019 ratings, which is where Humana sits,\u201d said Stephanie Link, chief investment strategist at Hightower Advisors, which owns less than 1% of UnitedHealth shares.<\/p>\n Medicare Advantage plan enrollment begins in October, just ahead of U.S. midterm elections that will determine whether Republicans can maintain their control of Congress. Voter anger over rising costs is often taken out on the party in charge.<\/p>\n \u201cWhen Medicare Advantage funding doesn\u2019t keep pace with costs, seniors pay the price. We\u2019ve seen it play out year after year,\u201d said Susan Reilly, vice president of communications at Better Medicare Alliance, a coalition advocating for the plans.<\/p>\n Seniors tend to reliably vote in large numbers.<\/p>\n Alex Mills, a professor at Baruch College\u2019s Zicklin School of Business, said customers may be surprised at the increase in out-of-pocket spending, and that could lead to political pressure.<\/p>\n \u201cIt would not be shocking if there\u2019s somewhat of a backlash,\u201d said Bill Smead, founder and chief investment officer of Smead Capital.<\/p>\n","protected":false},"excerpt":{"rendered":"NEW YORK >> Americans enrolled in Medicare Advantage health plans should expect to see fewer extra benefits like…\n","protected":false},"author":3,"featured_media":768969,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_share_on_mastodon":"0"},"categories":[35],"tags":[64,4582,210,1141,1142,67,132,68],"class_list":["post-768968","post","type-post","status-publish","format-standard","has-post-thumbnail","category-health-care","tag-business","tag-editors","tag-health","tag-health-care","tag-healthcare","tag-united-states","tag-unitedstates","tag-us"],"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@us\/116506987469680293","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/768968","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/comments?post=768968"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/768968\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media\/768969"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media?parent=768968"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/categories?post=768968"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/tags?post=768968"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}