More than 500,000 Americans are set to lose their Medicare Advantage plans as major insurer Humana exits 13 markets across the country. The announcement was made by the company’s Chief Financial Officer, Susan Diamond, during a Wells Fargo Healthcare Conference. She stated that roughly 560,000 members will need to find new plans.
“Nearly all of those members have other options,” Diamond said. “That is not atypical when we do plan exits.”
Health policy analyst Louise Norris from medicareresources.org explained that in most cases, there will still be Medicare Advantage plans available from other companies, even in areas where Humana plans might not be offered. Humana identified the markets it is exiting as not likely to be profitable.
“The exit itself is positive in the sense that those plans were not contributing,” Diamond noted. “If we do ultimately retain more of those members, that’s incrementally positive because the plan choices left behind are priced in a way that will be positively contributing.”
This move follows a broader trend of insurers leaving markets after the Centers for Medicare & Medicaid Services decided to lower its Medicare Advantage benchmark rate, leading to reduced profits for insurers nationwide. Humana is also anticipating higher utilization of supplemental benefits, such as over-the-counter (OTC) cards and dental services, contributing to financial changes.
“We are anticipating an even higher level of utilization in some of those services in the fourth quarter of 2024, just recognizing the benefit changes we’ve made for 2025,” Diamond said.
Humana’s market exit impacts 500,000
“If people get visibility to that, knowing that those benefits will be reduced, we do anticipate an even further elevated use of some of those benefits.”
Earlier this year, Humana announced it would end some plans and cut benefits in 2025 due to financial concerns.
Around 6 million Americans are currently insured through Humana’s Medicare Advantage. Finance expert and founder of michaelryanmoney.com, Michael Ryan, previously stated, “The insurer recently warned that rising healthcare costs are squeezing their business model, forcing them to slash benefits and potentially exit some markets altogether in 2025. And with over 6 million enrollees, Humana’s moves will ripple across the entire Medicare Advantage market.”
Humana’s CEO Bruce Broussard also addressed the ongoing financial challenges.
“We acknowledge that the industry is experiencing a dynamic and challenging time that we must navigate,” Broussard told investment analysts earlier in the year. This decision mirrors an industry-wide shift as insurers work to remain profitable while continuing to offer health plans to Americans. UnitedHealth’s CEO Andrew Witty and other industry leaders have echoed similar concerns.
“Our strategy continues to focus on providing as much stability as possible in the reduced funding environment,” Witty said during an investor call. Mutual of Omaha also ceased offering its standalone Medicare prescription drug plans due to higher costs related to the Inflation Reduction Act. Ryan suggested, “If major cuts are looming, it may be time to reevaluate your options, whether that’s shopping for a better Medicare Advantage plan or transitioning to traditional Medicare with supplemental coverage.”
- Newsweek.”More Than 500,000 Americans Set to Lose Their Medicare Advantage Plans”.
- LaGradaOnline.”Goodbye to Medicare Plans for thousands of Americans in 2024 – List of those affected”.
- HealthLeadersMedia.”Providers Are Fed Up With Medicare Advantage”.