Will insurers cut back on Medicare Advantage extras?

Challenges in the Medicare Advantage market may force insurers to cut back on extra benefits like vision and dental in 2025, The Wall Street Journal columnist David Wainer wrote Feb. 11. 

Insurers are facing two major headwinds in Medicare Advantage — rising medical utilization in the program, and lowered benchmark payments from CMS. MA plans are likely to prioritize margins over growth, cutting back on extra benefits that can attract consumers to plans, Mr. Wainer wrote. 

The program has grown rapidly in recent years, accounting for over half of Medicare enrollees in 2023, up from 29% a decade ago, according to KFF. This growth could slow down if insurers offer more modest benefits, Mr. Wainer wrote. 

On first-quarter earnings calls, some payer executives said they are prioritizing keeping costs in check over growing their MA membership in the coming year. 

Centene CFO Drew Asher said the company is turning its attention to improving its Medicare Advantage margins. 

"We'll just adjust the bids accordingly, and the products may be a little bit less attractive for seniors from an industry standpoint if we don't make a lot of progress on the final rates," he said. 

Brian Kane, president of Aetna and vice president of CVS Health, also told investors market growth is secondary to margins for the company. CVS Health added 800,000 new Medicare Advantage members in 2023, though this could be adding to pressure on its MA margins, Mr. Wainer wrote. 

"At this point, it looks pretty clear that next year's reduction in benefits is really going to reduce enrollment growth," Jefferies analyst David Windley told The Wall Street Journal. 

Read more here. 

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