Loss of Medicare Advantage could leave local seniors without insurance

ADDISON COUNTY — County residents on Medicare Advantage individual plans will all lose their current health insurance for 2026, unless they act soon.

That's because only three private companies provide Medicare Advantage to Vermonters — and two of them will stop offering the insurance and the third doesn't sell it in Addison County.

"A quarter of Vermont is on Medicare, a third of that is on Medicare Advantage plans," said Sam Carleton, the director of the State Health Insurance Assistance Program at Age Well. "It's going to be very, very challenging for us this year."

Medicare is the federal program that provides medical insurance for older Americans. Medicare Advantage consists of programs run by private companies intended to be less costly alternatives to Medicare.

The private companies that run Medicare Advantage plans take set fees from the federal government then provide care — hopefully more efficiently — that allows them to offer things like better dental and vision care.

Blue Cross Blue Shield of Vermont (BCBSVT) and UnitedHealthcare will be dropping coverage of Medicare Advantage individual plans next year, as recently reported by the Centers for Medicaid and Medicare Services. A third insurer, Humana, will continue offering their Medicare Advantage plans in only six Vermont counties — not including Addison County. Large employers may still offer their retirees coverage.

Currently, there are 51,600 Vermont seniors enrolled in Medicare Advantage plans. BCBSVT serves 26,000 of those people while UnitedHealthcare serves 7,800.

According to Age Well's Carleton, those are big numbers.

Age Well is an advocate for seniors operating in Northwestern Vermont. Its State Health Insurance Assistance Program (SHIP) provides Vermonters with free, confidential health insurance counseling and helps people assess their eligibility for Medicare. Each year, SHIP programs provide health insurance assistance to more than 6,000 Vermonters. However, Carleton said that following such a substantial disruption to the system, he believes the number of individuals seeking health insurance will skyrocket beyond the capacity of SHIP's team.

"We will do the best we can, but unfortunately it won't be enough with the need that will be there this year," he told the Independent. "Unfortunately…we just don't have the staffing."

Medicare Advantage plans, also known as Medicare Part C, provide Medicare benefits through private insurance companies that receive subsidies from the federal government. For years, private insurers marketed lower prices and more extensive benefits compared to traditional Medicare. Currently, half of eligible Medicare beneficiaries are enrolled in Medicare Advantage plans nationwide.

But profit margins have shrunk for insurers providing Medicare Advantage plans. What's happening in Vermont is part of a nationwide exodus from the Medicare Advantage market. UnitedHealthcare alone is dropping Medicare Advantage coverage for 180,000 people in 109 predominantly rural counties around the country, citing rising healthcare costs and increased utilization rates.

Medicare Advantage plans bundle Medicare Part A and B coverage, which are both provided by traditional Medicare. Part A covers 80% of inpatient care, hospice care and home health care costs, while Part B covers 80% of costs associated with outpatient care and services from doctors. Unlike traditional Medicare, many Medicare Advantage plans also provide Medicare Part D, which covers prescription drugs.

According to Carleton, it is vital that people losing their coverage look out for two letters that they should hold onto. The first letter comes from the Centers for Medicare & Medicaid Services stating that the plan will not be available in 2026.

The second is a notice of withdrawal from the insurance provider themselves (Blue Cross or United Healthcare).

"There's a deluge of mail people get at this time of year. It can be easy to miss those two pieces of mail," Carleton said.

DEADLINES COMING UP

According to a press release from the Department of Financial Regulation (DFR), those seeking to switch to a different Medicare Advantage plan must do so during the Medicare Advantage Open Enrollment period running from Oct. 15 to Dec. 7. But, again, there are no Medicare Advantage plans being offered to residents of Addison County.

However, those losing their Medicare Advantage coverage are guaranteed 63 days of open enrollment in any plan on the Vermont Medicare Supplement market after their Medicare Advantage coverage ends. This means that if your coverage ends on Dec. 31, 2025, your period to enroll in a Medicare Supplement plan, also known as Medigap, lasts until March 4, 2026.

Both Carleton and the Department of Financial Regulation emphasize that it's important to hold onto the insurance company's notice of withdrawal, as this serves as proof of eligibility for the 63-day enrollment period.

Medigap is a supplement to traditional Medicare provided by private insurance companies that helps cover out-of-pocket costs like copayments, deductibles and coinsurance. However, according to the DFR, the average cost of Medigap premiums in Vermont sits at around $245 a month, a cost that Carleton says is simply too high for many Vermonters.

"The changes we've seen in the past few years in terms of the plan landscape is either less plans or higher premiums. Those are the consistent things we've seen year in year out. That's a challenge for folks," Carleton said.

As a result, Carleton worries that many Vermont seniors will end up uninsured.

"When there's a giant change like this, I worry about people falling through the cracks," he said.

HOME HEALTH CARE

Those concerns are shared by health professionals like Deborah Wesley, the CEO of New Haven's Addison County Home Health and Hospice (ACHHH), which provides clinical care that includes nursing, physical therapy and occupational therapy.

"We are concerned about patients who have moved or have difficulty in understanding the meaning of these communications," Wesley told the Independent.

She said that for seniors in our area, cost and understanding the available options and what they cover remain consistent challenges. She noted that insurers who offer Medicare Advantage plans thrive on volume, and in rural areas like Addison County, they struggle to accumulate enough patients to be profitable. This means that Medicare Advantage plans were often more particular about what they were and were not willing to cover.

"In comparison to Medicare Advantage plans… (traditional Medicare) does not require frequent re-authorizations from physicians. In the past, Medicare Advantage plans were known for only authorizing a small number of visits at a time," Wesley said.

But the cancelation of most Vermont's Medicare Advantage plans comes at a challenging time for rural home health agencies like ACHHH, which provides important medical services in an aging state with an already beleaguered healthcare system. In 2024, BCBSVT, Vermont's largest insurer and one of the insurers withdrawing from the Medicare Advantage market, posted a record annual deficit of $62.1 million. Earlier this year, five of Vermont's 14 hospitals also reported multi-million-dollar losses.

"Our anticipation is that the revenue lost through the cancellation of Medicare Advantage plans will be offset by reimbursements earned by us through traditional Medicare. In some cases, traditional Medicare is a better payer source for us," Wesley told the Independent.

However, Wesley is deeply concerned that a projected 9% cut to Medicare home care reimbursements could undermine ACHHH's ability to recover from the loss of Medicare Advantage plans. The 9% cut would take effect in the calendar year of 2026 and follows a two-year period in which ACHHH's Medicare reimbursements were cut by 6.815%.

"Medicare reimbursements comprise 62% of our agency's total revenue and this amount of revenue is difficult to replace," Wesley said.

In the meantime, Carleton and the team at SHIP will continue helping seniors navigate the challenges of remaining insured. He said it's important that individuals with questions call their local SHIP office as soon as possible. Vermont's Agencies on Aging are increasing the number of SHIP volunteers and interns, and SHIP counselors will schedule as many appointments as possible before the Medicare open enrollment period ends.

Carleton emphasized that those unable to be accommodated by their local SHIP office can get 24/7 help and individual health insurance counseling at 1-800-Medicare (1-800-633-4227) or at Medicare.gov.