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Medicare Advantage Plans Face Benefit Cuts
1 May
Summary
- Medicare Advantage plans may reduce gym, vision, and dental benefits.
- Insurers face pressure from a 2.48% average payment increase for 2027.
- Humana is expected to implement the most significant benefit reductions.
Americans participating in Medicare Advantage health plans are likely to experience a decrease in supplementary benefits such as gym memberships and coverage for vision and dental care starting in 2027. The U.S. government announced an average increase of 2.48% in payments to insurers managing these plans.
Insurers, including Humana, UnitedHealthcare, and Aetna, have indicated that the revised payment rates are insufficient. Consequently, these companies are considering cutting added services like fitness programs, meals, and transportation assistance to manage costs and meet profit targets. Humana has stated it will be making the most significant reductions.
These benefit reductions are anticipated to occur as insurers finalize their plan changes, typically announced in June. Investors suggest that companies with high government exposure and average 'Star' ratings, like Humana, will be particularly affected. Potential voter backlash over increased out-of-pocket costs is also a concern, especially with Medicare Advantage enrollment beginning in October, preceding the U.S. midterm elections.
