Lots of Americans are going to lose their Medicare Advantage plans this week, which is bad news. Humana, a big insurance company, said it was leaving 13 markets across the country. This means that more than 500,000 Americans will lose their Medicare Advantage insurance.
Susan Diamond, the chief financial officer of the company, said this month at the Wells Fargo Healthcare Conference that about 560,000 members would have to switch to a new plan. Only about 10% of its Medicare Advantage users will be affected. Diamond said that almost all of these people could have done something else.
The list of beneficiaries that will lose their Medicare Advantage plans this year
Newsweek talked to Louise Norris, a health policy expert for medicareresources.org, who said that most of the time, Medicare Advantage plans from other companies will still be available, even in places where Humana plans might not be.
Because of this, most people who sign up will still be able to choose to get Medicare Advantage benefits. Diamond says that Humana is leaving some markets because they are not going to make them money.
Diamond also thinks that keeping current plans is a good thing because they weren’t hurting the organization, and even if they aren’t kept, it’s still a good thing because the remaining plan options are priced well and will help the organization succeed overall.
Many insurers left the Medicare Advantage market after the Centers for Medicare & Medicaid Services decided to lower its standard rate. This meant that insurers across the country made less money.
The business also thinks that some of the changes in finances will come from members using their extra perks, which include over-the-counter (OTC) cards and dental care, more often.
As Diamond said, because of the changes we made to benefits for 2025, we expect even more people to use some of those services in the fourth quarter of 2024. He also made it clear that they expect even more people to use some of those benefits if people know about it and know that those benefits will be cut back.
Humana anticipates a higher benefit utilization rate
Humana also thinks that some of these benefits will be used a lot more in the fourth quarter of 2024 because of the changes we made to them for 2025, Diamond said. As more people learn about these benefits and realize that they will be cut back, we expect them to be used even more.
Michael Ryan, a financial expert and founder of michaelryanmoney.com, told Newsweek that the insurer has warned that rising healthcare costs are putting a strain on its business model and may force it to cut benefits or even leave some markets in 2025.
Humana has almost 6 million members, so what it does will affect the whole Medicare Advantage market. Bruce Broussard, CEO of Humana, has said in the past that the company had to make some cuts because of changes in the industry.
Earlier this year, Broussard told stock analysts that they know the industry is going through a tough time that the company needs to get through.
Why is Medicare important for millions of Americans?
Medicare covers health care costs for people who are eligible, just like health insurance does. Medicare is free in its most basic form, but it doesn’t cover as much as private health insurance does, and it doesn’t cover free preventive care or ongoing care for long-term conditions.
When you have private health insurance, you can often add relatives like your spouse and children. Medicare recipients, on the other hand, must meet certain criteria, such as being at least 65 years old and qualified for Social Security, getting 24 months of Social Security Disability Insurance (SSDI) no matter what age they are, or having certain disabilities.
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