More Than 500,000 Americans Set to Lose Their Medicare Advantage Plans

More than 500,000 Americans are scheduled to lose their Medicare Advantage plans now that major insurer Humana is leaving 13 markets across the country.
The company’s Chief Financial Officer Susan Diamond made the announcement during a Wells Fargo Healthcare Conference this month, saying roughly 560,000 members would need to find a new plan.
That impacts roughly 10 percent of its Medicare Advantage participants.
More From Newsweek Vault: Learn About the Best High-Yield Checking Accounts
“Nearly all of those members have other options,” Diamond said. “That is not atypical when we do plan exits.”
“In most cases, there will still be Medicare Advantage plans available from other companies, even in areas where there might not be any Humana plans,” Louise Norris, health policy analyst for medicareresources.org, told Newsweek. “So most enrollees will still be able to be covered by Medicare Advantage if that’s their choice.”
Newsweek reached out to Humana for comment via email.
More From Newsweek Vault: Online Banks vs. Traditional Banks: Learn the Differences
The specific markets Humana is exiting from are those that are not likely to be profitable, Diamond said during the conference.
“The exit itself is positive in the sense that those plans were not contributing,” Diamond said. “And so just exiting, even if we don’t retain the members, is positive. 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.”
More From Newsweek Vault: Checking Account vs. Savings Account: Which is Best for Your Finances?
Many insurers have been leaving markets after the Centers for Medicare & Medicaid Services decided to lower its Medicare Advantage benchmark rate, leading to reduced profits for insurers across the country.
Humana is also anticipating that members will utilize their supplemental benefits, from over-the-counter (OTC) cards to dental services, at higher rates, leading to some of the 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. “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 in the year, Humana said it would be ending some plans and cutting benefits for patients in 2025 due to financial concerns.
Currently, around 6 million Americans are insured through Humana’s Medicare Advantage.
“The insurer recently warned that rising health care costs are squeezing their business model, forcing them to slash benefits and potentially exit some markets altogether in 2025,” Michael Ryan, a finance expert and the founder of michaelryanmoney.com, previously told Newsweek. “And with over 6 million enrollees, Humana’s moves will ripple across the entire Medicare Advantage market.”
Humana’s CEO Bruce Broussard also previously said that the company was forced to make some cuts based on changes in the industry.
“We acknowledge that the industry is experiencing a dynamic and challenging time that we must navigate,” Broussard told investment analysts earlier in the year.
Humana’s decision reflects an industrywide shift as insurers decide how to remain profitable while still offering health plans to Americans.
UnitedHealth’s CEO also indicated they were navigating the same financial headwinds.
“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.
Mutual of Omaha also stopped offering its standalone Medicare prescription drug plans due to the higher costs related to the Inflation Reduction Act.
“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,” Ryan said.