Data Show Two Years of Cuts to MA Cause Higher Costs, Reduced Benefits for Seniors

Two years of cuts to Medicare Advantage (MA) payment rates have resulted in fewer options, higher out-of-pocket costs and reduced supplemental benefits for seniors and individuals with disabilities in 2025, according to several recent analyses.

Fewer Options: Following the cuts to MA, seniors have fewer MA offerings to choose among and, in some cases, MA plans have had to exit the market, causing beneficiaries to lose their current coverage and forcing them to choose new coverage for 2025.

• Nationally:
  
  
  • The number of MA plans with prescription drug coverage (MA-PDs) in 2025 that will be broadly available to all MA enrollees (general enrollment plans) decreased by 6% relative to 2024. (MAST HP)
    
    
  • Six organizations offering MA-PDs will exit the MA market altogether in 2025. (Milliman)
    
    
  • Over 60% of Medicare beneficiaries live in counties with fewer plans in 2025 relative to 2024. (MAST HP)
    
    
• As a result of the coverage losses, more than 7% of MA enrollees (almost 2 million individuals) will be forced to choose a new coverage option for 2025. (ATI) (BMA – 1.98 million)
  
  
• Other types of coverage losses for 2025:
  
  
  • The number of $0 premium MA-PD plans will fall by 10%. (FTI)
    
    
  • There will be a substantial drop – 34% - in the number of stand-alone Part D plans (PDPs). (FTI)

Higher Out-of-Pocket Costs: While national average premiums will fall slightly in 2025 (to $17, down from $18.23 in 2024, according to CMS), enrollees in some states will see significant premium increases. Cost sharing for services will also increase.

• Multiple states will see more than a 10% increase in average premium for general enrollment MA plans: Alabama, Georgia, Idaho, Indiana, Iowa, Louisiana, Maine, Massachusetts, Missouri, New Jersey, New York, North Dakota, South Carolina, South Dakota, Utah, Vermont, Washington, and Wyoming. (MAST HP/AHIP)
  
  
• For 2025 maximum out of pocket (MOOP) levels for general enrollment plans will increase.
  
  
  • The median MOOP will increase 8% from 2024, to $5400. (BMA)
    
    
  • The share of general enrollment plans with a MOOP of $3,500 or less will fall from 23% to 20%, while the share of plans with a MOOP over $5,000 will rise from 46% in 2024 to 52% in 2025. (MAST HP/AHIP)
    
    
• Deductibles for 2025 are also rising.
  
  
  • The average Part D deductible for MA-PDs will rise from $103 in 2024 to $269 in 2025.(FTI)
    
    
  • The share of MA-PD plans with a $0 Part D deductible will decline dramatically, from 67% in 2024 to 40% in 2025, while the share of MA-PD plans with a deductible of more than $300 will increase by almost 350%, from 12% of MA-PDs in 2024 to 43% of MA-PDs in 2025. (MAST HP)

Reduced Supplemental Benefits: The vast majority of plans will continue to include dental, vision, and hearing coverage (ATI). However, payment cuts have resulted in reductions in other supplemental benefit offerings for 2025.

• The share of general enrollment plans offering an over-the-counter benefit will fall from 86% in 2024 to 73% in 2025, while offerings of nutrition benefits will decrease from 40% of general enrollment plans to fewer than 30%. (BMA)
  
  
• Special Needs Plans, which serve specific enrollee populations based on dual eligibility for Medicaid and Medicare services, individuals with specified chronic diseases like diabetes, heart disease, or ESRD, or those who require institutional care, will offer reduced benefit offerings in 2025, including less access to medical nutrition therapy, in-home supports, and caregiver support. (FTI)

Click here to view an infographic highlighting the value of MA over fee-for-service Medicare.

SOURCES:

CMS: https://www.cms.gov/newsroom/fact-sheets/medicare-advantage-and-medicare-prescription-drug-programs-remain-stable-cms-implements-improvements
ATI: Unpublished webinar slides, October 3, 2024.
MAST HP: Unpublished analysis of CMS landscape files conducted for AHIP.
AHIP: https://www.ahip.org/news/articles/two-years-of-cuts-to-medicare-advantage-are-negatively-impacting-seniors
Milliman: https://www.milliman.com/en/insight/medicare-advantage-ma-pd-plans-2025
BMA: https://bettermedicarealliance.org/wp-content/uploads/2024/10/Analysis-of-the-2025-Medicare-Advantage-Plan-Landscape.pdf
FTI: Unpublished analysis of CMS 2025 landscape files, conducted for AHIP. (Note: Analysis is not yet final)