Medicare Advantage Plans Are Disappearing

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Sasha-Ann Simons (0:27)

Hey Chicago, I'm Sasha-Ann Simons, and this is In the Loop.

Be sure to listen all the way through the podcast for a breakdown of the day's top local stories. But first, open enrollment starts today, but for some Medicare Advantage customers, it might come with an unwelcome surprise. Their plan is either changing or disappearing. And the reaction all across the country probably sounds like this woman.

Lisa Lavez (0:57)

I was so mad.

Sarah Karp (0:58)

I was like, no, now what do I do?

Lisa Lavez (1:00)

I look at my husband and say, now what?

Sasha-Ann Simons (1:02)

Now what? Well, major insurers are scaling back, and that could mean fewer options and higher prices. So in this episode of the pod, we're checking in with an expert to help us make sense of it all. At the table with me was Dan Weissmann, host and executive producer of the podcast An Arm and A Leg, which covers the healthcare industry.

Now, so many health terms are flying around here, so I thought it would be good to start with a couple of definitions. What's the difference between Medicare and Medicare Advantage? Here's how Dan put it.

Dan Weissmann (1:31)

Good question and great place to start, and take a big sip of coffee. We're going to nerd out for just a second.

Medicare comes in these two basic flavors, what's called traditional Medicare, which is run by the United States government, and what's called Medicare Advantage, which is our plans run by private insurance companies, and often companies with names you'll recognize like United, Aetna, Humana, Blue Cross.

And these Medicare Advantage plans have gotten really popular. Like a little more than half of seniors on Medicare are in these plans, and that's because they offer some benefits that traditional Medicare, or they usually offer some benefits that traditional Medicare doesn't like vision, and hearing, and dental, which are pretty important. And they often have lower out-of-pocket costs, including reducing the premium that you would pay. Because Medicare, as I found out, as I started investigating all this, isn't free health care, you pay a premium for it. And there's a whole other side to what's missing from regular Medicare, which is, for most of regular health care, like if you're not going into the hospital as an inpatient or at the pharmacy counter, pretty much everything else, Medicare only pays like 80% and 20% of the rest of your health care can be a lot. And there's no limit to what you can pay. So to get covered for that, you got to buy a supplemental plan, which is another couple hundred bucks a month. So Medicare Advantage starts to look pretty good for a lot of people. Of course, it has disadvantages, which anybody who has spent time on hold with companies like Humana and Etna and Cigna and Blue Cross will come right to mind. They can tell you, no, you can only see these doctors. And they can tell you, no, we're not going to pay for that. And then what we're seeing this year is essentially a new disadvantage emerging. It really started last year, which is they can say, you know what, this plan you're in, it's not going to be a money maker for us in your area. So it's just not available. You got to go find something else.

Sasha-Ann Simons (3:38)

So let me just make sure I get you here. Medicare Advantage plans, which, as you pointed out, they cover a lot of the gaps that the traditional Medicare doesn't cover. But plans are getting discontinued by those major insurance companies across many states, including here in Illinois.

Why are plans for Medicare Advantage getting discontinued? Just so we're clear.

Dan Weissmann (3:59)

Yeah, no, I mean, companies have said in their statements to investors like, yeah, we're looking to make sure that we're focusing on markets where we make the most profits. So they're doing the math. They're thinking like, yeah, this one's not a winner for us. We're just going to shut it down.

Sasha-Ann Simons (4:16)

Yeah. So who's most affected by this?

Dan Weissmann (4:19)

This is a super good question. And honestly, there's numbers that we're still, there's not all the numbers are out. Not all the numbers are easy to grasp. But across the country, estimates are four to five million people. And that's all over.

There are almost 200 counties in the US, in the United States where for this next year, no Medicare Advantage plans are being offered at all. Those are mostly rural areas. But there are big reductions in big metro areas too, including the Chicago area. A dozen plans or so in Chicago are not going to be on offer next year.