Advocates hold signs during a news conference on Medicare Advantage plans in front of the U.S. Capitol on July 25, 2023 in Washington, DC.
Alex Wong | Getty Images News | Getty Images
Medicare Advantage enrollment is poised to fall for the primary time in nearly 20 years, in keeping with the Centers for Medicare and Medicaid Services.
The agency estimates that enrollment in this system shall be 34 million in 2025 – marking lower than half of all seniors — down from nearly 35 million this yr, in keeping with projections from health insurers.
Despite the projected pullback, the agency announced late Friday it “anticipates that enrollment in [Medicare Advantage] in 2026 shall be more robust than the plans’ projections,” and that the market will remain stable. Seniors will see they’ve a median of 10 plans to pick from in most markets after they get their first take a look at 2026 plans on Wednesday.
After chasing growth within the Medicare marketplace for greater than a decade, health insurers have faced shrinking profits of their Medicare Advantage programs over the past two years, as members tally higher-than-expected medical costs and latest regulations pressure government reimbursement rates. The larger insurers are actually cutting back on unprofitable plans and exiting some markets altogether.
“We’re seeing most medical health insurance carriers — most Medicare Advantage carriers — be far more focused on profitability relative to growth this yr,” said Cobi Blumenfeld-Gantz, founder and CEO of Chapter, a brokerage which helps Medicare members enroll in coverage. “A number of the plan advantages is not going to be as robust as they’ve been prior to now.”
Higher costs in 2026 plans
CMS projects that the typical monthly premium across Medicare Advantage plans will decrease from $16.40 this yr to $14 in 2026. Nonetheless, when the preliminary open enrollment period kicks off on Wednesday, seniors may find higher pricing across most of the large insurer plans.
Analysts at Evercore ISI say initial data on 2026 offerings point to higher prices for plans from UnitedHealth Group‘s UnitedHealthcare, CVS Health‘s Aetna, Elevance, Humana and others.
“Our preliminary evaluation shows that payors took motion to enhance margins through profit reductions including higher premiums, deductibles and out-of-pocket maximum,” said Evercore ISI’s Elizabeth Anderson in a research note. “Particularly, we saw (insurers) take more motion on HMO plans which overall saw a more sizable cut to advantages.”
Retirees protesting the Medicare Advantage situation referring to the 12-126 law outside of City Hall in Latest York on Oct. 12, 2022.
Shawn Inglima | Latest York Every day News | Tribune News Service | Getty Images
Analysts say insurers are prioritizing HMO, or health maintenance organization, plans for 2026, which are inclined to have more limited provider networks. Though corporations are raising deductibles on those plans, seniors will still see offerings with $0 premiums, in keeping with analysts.
“That’s one area that carriers are very reticent to the touch. So, they’re more prone to cut advantages long before they might add a premium to a $0 product. However the products that have already got premiums today … are prone to see increases,” said Brooks Conway, a principal at consulting firm Oliver Wyman.
Insurers decommission plans
Seniors are inclined to work with insurance brokers and agents to assist sort through their options during open enrollment. So, certainly one of the ways insurers try to spice up enrollment in additional profitable plans is by prioritizing commission rates. They’ll pay higher rates on some plans and none in any respect for others.
This yr, the carriers are increasingly eliminating broker commissions on a large swath of less profitable plans.
“It isn’t something that is out of the norm for that to occur, but the quantity of the plans cutting and being de-commissioned, that is what’s not normal,” said Michael Antoine, an independent medical health insurance agent with Partner Insurance Solutions.
For 2026 open enrollment, 15% to twenty% of plans have been decommissioned across a lot of the country, in keeping with data compiled for CNBC by Chapter. In some markets like Latest York, insurers have cut commissions on greater than 25% of plans, while in parts of Georgia it’s greater than 35% of plans. Â Â
“This yr particularly, it is so essential that folks ask their Medicare advisor if there are plans which are available that the Medicare advisor might not be taking a look at due to these non-commission challenges,” said Chapter’s Blumenfeld-Gantz.
Even after they’re willing to forego commissions, brokers may not have the opportunity to get access to a few of those plans on their brokerage systems.
“I had an experience, and I’m not going to say the carrier, where I could not even enroll the person into the plan,” Antoine said. “It was being completely suppressed. They didn’t want membership into that plan.”
Insurers are betting that with more restrictive offerings and enrollment, they will get a greater handle on membership and costs for 2026. But with a lot disruption out there, uncertainty stays high.
“Enrollment is especially difficult for plans to project in years like this one, where so many carriers are reducing advantages and adjusting their portfolios,” said Conway. “A plan might expect to scale back [Medicare Advantage] enrollment because they leaned out (of) advantages, only to search out out that a serious carrier exited their market, and the remaining carriers also leaned out their advantages.”
Open enrollment kicks off
Medicare enrollees should get notices from their insurers about changes to their current health plans this week, when the shopping period for 2026 open enrollment begins on Wednesday. With so many changes out there, brokers say seniors have to shop around this yr and weigh their options.
“The shouldn’t be the yr to go on autopilot,” said Whitney Stidom, vice chairman at online brokerage eHealth. “Doing comparison shopping can save over $1,800 in out-of-pocket costs just by simply comparing plans and potentially finding something that can save them more.”
A looming government shutdown, which could start Oct. 1, could add a bit more uncertainty to this yr’s enrollment, with Congress at an impasse on a funding agreement.
A former CMS official told CNBC a brief shutdown shouldn’t impact open enrollment, because funding for contractors who oversee the method has already been allocated and can proceed.
On Saturday, CMS announced that critical services for Medicare and Medicaid wouldn’t be affected by a shutdown, though the agency wouldn’t have funding to offer oversight to contractors, including those that administer the Medicare call centers.
The Medicare open enrollment period runs from Oct. 15 through Dec. 7.
