Going into 2024, we knew changes were on the horizon for Medicare Advantage and now we are seeing transformation cascade into the market. With half of the year over, we thought it would be a good time to review what has happened and look at what lies ahead in the ever-changing MA landscape.
Medicare Advantage Tops in 2023
This year started with some very good news on the MA front. Early in 2024, it was announced that Medicare Advantage had become bigger than traditional Medicare in enrollment. For the first time in Medicare history, more people are now enrolled in private Medicare Advantage plans than in traditional Medicare. In 2023, 30.8 million people were enrolled in Medicare Advantage plans, 51% of the eligible Medicare population.
The New Rules
Commissions and Fees
In early April, the Centers for Medicare & Medicaid Services (CMS) announced new 2025 rules affecting agent commissions. The CMS established a fixed amount a Medicare Advantage plan can compensate a broker or agent. All plans pay the same amount of commission for the sale of an MA policy. Commissions will be higher for new enrollments and lower for renewals but the same for each plan.
The CMS also ended the practice of insurance providers paying agents administrative fees. The CMS said these compensation changes were necessary to protect consumers and place “guardrails” on the industry.
2025 Rate Increase
The CMS finalized 2025 rates for Medicare Advantage (MA) and Part D prescription drug plans, with the CMS announcing a payment increase of 3.7% expected over 2024 for MA plans.
There are concerns in the MA industry that the expected increase in payments will not cover the full rise of 2025 healthcare costs. This could lead to a cut in benefits for Medicare Advantage plans, which will lead to more consumer cost share.
Privacy and Marketing
The CMS has made it a requirement that beneficiaries must now give express, written consent that personal data collected by a TPMO (third party marketing agency), for marketing or enrolling into a Medicare Advantage or Part D plan, can be shared with other TPMOs.
Provider Changes
Providers of Medicare Advantage plans have made announcements this year. Here is a recap:
- Humana and CVS announced reductions in benefits and geographic reach of their MA plans for next year.
- Blue Cross and Blue Shield of Kansas City announced it is pulling out of Medicare Advantage plans in 2025.
- Devoted Health announced a planned expansion of Medicare products into the states of Arkansas, Georgia, Indiana, Kentucky, Mississippi, Missouri, and Washington.
Star Ratings Change
In a major win for insurers, the CMS announced in June it will re-calculate 2024 star ratings for insurers and only change the ratings if they improve. The ratings are important because they are used by consumers to select insurers and they also can determine bonuses paid by the CMS to insurers.
The change could send hundreds of millions of federal dollars to insurers and follows court rulings regarding star ratings.
What’s Ahead?
The Part D redesign is also taking place and more changes in that program will be announced in the coming months. It will also be interesting to see what companies will change plans, pull out of MA, or expand in the current environment.
The changes in the MA market are not done!
How Agility Can Help
We’ll keep our ears to the street and keep you posted as we learn more about these changes. Agility is constantly updating our agent partners on changes in the health insurance industry so that you have the best information available to help your clients. We offer top commissions, training, administrative support and many other services to help you succeed. Find out how to partner with Agility by contacting us at 866-590-9771.
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