Medicare Advantage plans aren’t going away

Editor's note: The following article is part of a series on what Medicare clients are asking their advisors as open enrollment period approaches.

Deb Nelson is reassuring her Medicare Advantage clients that the plans they like are not going away.

Nelson is a licensed agent with Ark Insurance in Salt Lake City.

She told InsuranceNewsNet the biggest issue she is seeing in advance of Medicare open enrollment is client concerns about the future of Medicare Advantage.

“I hear from clients who tell me, ‘I love my advantage plan but I see so much on the news and on YouTube about how horrible these plans are and that they’re going away,’” she said. “And I tell them that Medicare Advantage plans are not going away.”

Nelson said she educates her clients about the pros and cons of both Medicare Advantage and Medicare Supplement plans.

“I have some clients who say they only want a supplement because they’ve heard bad things about advantage plans. And I have other clients who say they love their advantage plans. So clients are concerned about having options.”

Prescription drug costs are also high on the minds of Nelson’s Medicare clients. The Inflation Reduction Act contains a number of Medicare prescription drug provisions aimed at lowering out-of-pocket costs beginning in 2025. Nelson said her clients are asking questions about what those provisions will mean for them.

“Anytime there’s a major change in Medicare and people see about it in the news or they see advertisements that may or may not be accurate, they have questions,” she said. “It causes a little bit of confusion and concern.”

Nelson said her clients who are on Medicare Advantage plans “absolutely love them, because of the optional supplemental benefits and because the copays are so low.”

“People like the predictability – they like knowing how much they are going to pay if they have to go to the hospital.”

She said her Medicare Supplement clients have faced some premium rate increases in recent years and are questioning whether they can afford to stay on their plans.

“In our area, we have really good options in both advantage and supplement plans,” she said. “We have advantage plans that have care managers to help them access care they need and follow up with them, while the supplement plans let them go to any doctor or hospital, but they won’t have a care manager follow up with them after they receive care.”

Another trend Nelson said she is seeing is with clients who are moving from Affordable Care Act marketplace plans to Medicare. “They feel Medicare is unaffordable to them,” she said. “They are seeing huge premium increases when going to Medicare Parts A and B.

“These clients were on subsidized plans, making the premiums low for them and, in some cases, for their spouse. Many were in the $60-$200 monthly premium range on the marketplace. They don’t qualify for Medicaid and many are over the low-income subsidy limit as well but they don’t have a high income. They then have to pay Part B at $174.40 per month. It is a huge increase for them. They also lose the tax credit that they had with a marketplace plan. If they have a younger spouse on a marketplace plan, that increases as well.”

Nelson said she has seen clients paying $200 a month for themselves and a spouse for a marketplace plan and now have to pay $174 monthly for Part B while the spouse who is not old enough for Medicare now having to pay $400 monthly for health insurance.

“So in essence, they face a $374 monthly increase for turning 65 and going on Medicare.”

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Susan Rupe is editor in chief, magazine, for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at [email protected].