Over 49,000 Medicare Advantage plans being canceled next year

Imagine opening your mail and finding out your health insurance plan is disappearing in a few months. That is what happened to 72-year-old Portland retiree Shoshana Hoose, who recently received a letter saying her Martin's Point Medicare Advantage plan would no longer be available in 2027. Now she has to find another plan during Medicare's open enrollment period. She is not even sure whether her January doctor's appointment will be covered.

And Hoose is far from alone. Nearly 3.2 million Medicare Advantage enrollees nationwide are losing their plans for 2027, according to Medicare Market Insights. In Maine alone, the state insurance bureau says 49,297 Medicare Advantage plans are being discontinued next year.

The plans are disappearing, but Medicare Advantage isn't

To be clear, Medicare Advantage isn't going away. Medicare Advantage is the private-insurance alternative to traditional Medicare for people 65 and older. These plans can come with extras that traditional Medicare doesn't typically offer, including dental and vision coverage and gym memberships.

The problem is that insurers are changing which specific plans they offer. Martin's Point, for example, is discontinuing 1,528 plans for 2027, representing 63% of its plans, according to Medicare Market Insight. The company says it is introducing new plans to replace them and will continue offering Medicare Advantage coverage across Maine.

Why are insurers cutting plans?

One major factor is money. Health policy consultant Mitchell Stein says changes made during the Biden administration to rein in Medicare Advantage overpayments contributed to insurers cutting back.

The administration moved in 2023 to recover what it considered improper payments to Medicare Advantage insurers. In response, insurers have been trimming their offerings. That can mean fewer benefits, narrower networks of doctors and potentially more out-of-pocket costs for patients.

The timing is not the best

Medicare's open enrollment period began Thursday and runs through December 7. That gives affected beneficiaries a limited window to figure out what they are switching to for 2027. This could mean fewer perks. Medicare Advantage became popular partly because it can offer benefits traditional Medicare doesn't, including dental, vision and fitness perks. But insurers cutting back could mean those extras become less generous.

Insurers, according to Stein, have been reducing benefits to bring their services closer to traditional Medicare while using narrower provider networks to control costs. So while affected customers may still have Medicare Advantage options, the replacement plan may not feel like an upgrade.

Source: Press Herald