Around 6,000 seniors are set to lose their health care plans as yet another Medicare Advantage insurer adapts to cost pressures.
MVP Health Care will be ending its UVM Health Advantage Plan program in Vermont because of rising health care costs and lower Medicare reimbursement rates, the company announced this week.
The plan was originally offered with the University of Vermont Health Network (UVMHN), but now thousands will need to find new coverage options.
“What we’re seeing here is just a continuation of other advantage plans nationwide that are restructuring and sadly in some cases dropping coverage for a large number of participants,” Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, told Newsweek. “Rising expenses paired with lower payouts from Medicare are the perfect combination for these entities to want out, and unfortunately, it’s the person who needs the care who is the one who pays the cost, both in terms of care and financially.”
If affected, seniors should receive a letter alerting them about the next steps and how to enroll in a new plan. The enrollment period to pick an alternative plan runs from October 15 to December 7.
“In the face of necessary strategic change and given the knowledge that certain upcoming regulatory adjustments are inevitable, we find ourselves needing to narrow our focus,” Richard Dal Col, president of MVP Health Care, said in a statement. “Our partnership with UVMHN, characterized by a mutual commitment to innovation and improving the health of the communities we serve, remains robust and continues outside the context of the UVM Health Advantage plan.”
Newsweek has reached out to MVP Health Care for comment via email.
Meanwhile, the plan is scheduled to end at the start of 2025 in Vermont, however, it will continue to be available to residents in five designated northern counties in New York.
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All MVP Health Care customers will still have access to UVMHN providers, with UVMHN saying that it will continue to provide emergency care regardless of what insurance they have or lack thereof.
“We’ve been saying it for a while now, but seniors have to be so much more vigilant about their healthcare options than in years past,” Beene said. “The changes combined with some providers making significant choices year-over-year make it essential for seniors to read over updates and see how they’re affected by any alterations.”
This isn’t the first time an insurer has kicked seniors off Medicare plans amid rising health care costs.
Centene Corp announced roughly 40,000 seniors would need to choose new plans in at least six states due to cost pressures in Alabama, Massachusetts, New Hampshire, Rhode Island, New Mexico and Vermont.
“We’ve said before that we expect to shrink in 2025 as we think about what business is going to serve this well in the long run,” Centene CFO Andrew Asher said during the company’s second-quarter earnings call. “First we’ve got to chip away at the degree of run rate negative margin and push towards break even and then we can talk about what the margin opportunity is in Medicare.”
Humana also announced it would be leaving specific markets in 2025. A few hundred thousand customers will likely be lost as a result as the company aims to boost profits.
UnitedHealthcare executives have also been vocal about staying cost effective amid dwindling Medicare Advantage profits.
HealthPartners will be exiting from the Medicare Advantage plan provided by UnitedHealthcare next year. The company decided to pull back based on payment delays and Medicare Advantage coverage denials, causing 30,000 patients to be in need of a new plan.
“Our strategy continues to focus on providing as much stability as possible in the reduced funding environment,” UnitedHealth CEO Andrew Witty said during an investor call this year.
Beginning next year, the Inflation Reduction Act’s cap on out-of-pocket drug costs goes into effect, meaning seniors won’t pay more than $2,000 on their prescriptions.
However, due to this change and lower reimbursements, premiums are likely to grow for the average senior.
“It’s not all sunshine and rainbows,” Michael Ryan, a finance expert and the founder of michaelryanmoney.com, previously told Newsweek. “While the changes aim to cap costs, we might see some premium increases as plans adjust. It’s like squeezing a balloon. Push down on one end, and the other end pops up.”
Kevin Thompson, a finance expert and the founder and CEO of 9i Capital Group, said Americans should expect more Medicare Advantage plans to disappear as insurers struggle to navigate the new cost pressures.
“As healthcare costs continue to rise, particularly in prescription drugs, there is growing scrutiny over why expenses remain high,” Thompson told Newsweek. “Historically, the federal government has paid higher costs for medical insurance, and there is concern that some companies may have taken advantage of the reimbursements they could receive. This situation will likely continue until cost structures are better managed.”