Has the worm turned...

...on Medicare Advantage?

Medicare Advantage (MA) plans - a privatized version of Medicare for those who are Medicare-eligible - now account for more than half of all Medicare recipients. These plans are advertised on TV and elsewhere, mainly to retirees, and seemingly provide a cheaper option than traditional Medicare with an insurance supplement. To entice enrollment, they generally tout add-ons such as gym memberships. In principle, the plans are to provide whatever traditional Medicare would. But once retirees enroll, actual eligibility for procedures is determined by the insurance company.

For many years, there have been allegations that the federal government is overpaying insurers on a risk-adjusted basis, thus accounting for the promotion and grown of MA plans. UC in particular offers an MA option which is cheap compared with the traditional Medicare+supplement package. At one time, UCOP - or some within UCOP - seemed to have a grand plan to offer only MA to retirees and emeriti, although that effort was halted after protests. So the question at UC and nationally now is what happens if the feds decide they are overpaying and begin to cut back. Many UC retirees and emeriti have gone the MA route because it is cheap. Now it appears that anticipated development at the federal level is beginning to occur. From Yahoo Finance:

Health insurers usually breathe a sigh of relief after the federal government posts final Medicare Advantage payment rates. Normally, after a public comment period (and aggressive industry lobbying), regulators finalize a friendlier notice than what they originally put out. That was not the case ...when the Biden administration finalized MA rates for 2025 essentially unchanged from a proposal that had industry up in arms earlier this year. It’s a modest base rate cut, though regulators stressed that insurers will still get billions of dollars more in 2025 than they will this year after coding for members’ medical conditions.

Still, shares in major MA players including UnitedHealth, Humana, Elevance, CVS and Centene fell Monday after the rates, which Leerink Partners senior research analyst Whit Mayo deemed “well below expectations,” were finalized. Insurer lobbies slammed the rule, with groups like the Better Medicare Alliance and AHIP arguing it doesn’t account for rising care utilization among Medicare seniors and will force payers to reduce benefits and raise premiums...

Full story at https://finance.yahoo.com/news/biden-administration-finalizes-modest-cut-164714253.html.