Why Are So Many Plans Going Away This Year?

Each fall during open enrollment, a portion of Medicare Advantage beneficiaries learn that their plan will no longer be offered. Some insurers pull out of specific counties; others exit entire states. If you are one of those losing coverage, you have options — but you need to act within your enrollment window. Here is why plan exits happen and exactly what to do next.

Why Are Medicare Advantage Plans Being Discontinued?

Plan exits happen when insurers determine a market is no longer profitable. Hundreds of thousands of Medicare beneficiaries have faced this in recent years as financial pressures on insurers have mounted. Key drivers include:

• The $2,000 Part D out-of-pocket cap. Since 2025, all Medicare Part D plans must cap enrollees' annual drug costs at $2,000. While a major win for beneficiaries, it shifted significant cost back to insurers.
• Medical inflation. Healthcare utilization and costs have risen sharply since the pandemic, driven in part by delayed care and long COVID complications.
• Lower government reimbursements. CMS has reduced reimbursement rates for hospitals and physicians, squeezing the margins insurers depend on to offer competitive plans.
• The Inflation Reduction Act. Provisions like expanded insulin caps and vaccine coverage benefit enrollees but increase plan costs.

Plan exits aren’t new. However, this year expects a lot more plan exits than an average year. In addition to the above, some blame the problem partially on COVID. With some lingering effects and complications from COVID, people are utilizing their insurance more often. On top of this, there are cases of major conditions that could have been prevented if COVID had not restricted access to care.

What should I do if I am impacted by a Plan Exit?

If you receive or received a notice about the discontinuation of your Medicare Advantage plan, you have options. To start, you are guaranteed to move into another Medicare Advantage plan, if one is available and you choose to. You also have the option to defer back to Original Medicare. If you do, you can get a Medicare Supplement. In fact, this is the best time to enroll in a Medicare supplement plan.

Typically, you have a guaranteed issue period, during which you can apply for Medicare Supplement without health underwriting. If you miss this period, a health underwriting is required. This is to determine your eligibility and premiums. It can also make it very difficult for people with medical conditions to be accepted on a Medicare Supplement plan. However, if your plan is discontinued, you can enroll in Medicare supplement without health underwriting.

For both Medicare Advantage and Medicare Supplement, you can enroll with any company and they have to accept you.

Any seniors who find their Medicare Advantage plans going away, we encourage you to explore your options. Furthermore, we recommend all seniors review their plan and compare it against other plans. There are plenty of good plans out there, and there may be a better fit for you.

As always, if you find yourself in need of advice, reach out to one of our licensed Medicare Advocates. We are focused on your health needs, and will work tirelessly to get you the right plan for you!