Humana is making significant changes to its Medicare Advantage plans, affecting approximately 600,000 members. The insurer plans to end certain plans by 2027 as part of a strategy to improve profitability. Instead of widespread cuts, Humana is targeting lower-performing plans.
Plan Termination Impact
Those affected will not lose Medicare eligibility, but they will need to select new coverage if their current plan is not renewed. Humana, one of the largest Medicare Advantage insurers, expects significant reshuffling due to this decision.
Medicare Advantage plans are popular among retirees because they offer healthcare, prescription drugs, and additional benefits in one package. Losing a plan may require users to change doctors, review drug benefits, or choose between Medicare Advantage and original Medicare.
Details from Humana’s Earnings Call
On July 29, during Humana’s earnings call, the company announced that these changes would affect around 600,000 members. The focused exit from less profitable plans aims to enhance financial health. Drew Powers from Powers Financial Group states that Medicare Advantage plans, unlike traditional Medicare, have a profit motive, so less profitable plans might be cut.
Humana indicated that some members might remain within its network by selecting alternative Humana Medicare Advantage options. The company hopes to retain a similar recapture rate from past exits, with more than 40% of members transitioning to other plans.
Consequences of Plan Discontinuation
Members will need to select new coverage if their plan exits the Medicare Advantage program. Those who don’t choose an alternative plan typically revert to original Medicare once their coverage ends. Kevin Thompson from 9i Capital Group notes potential industry consolidation, suggesting that reduced competition might lead to higher prices or diminished plan offerings.
Plan Non-Renewal Notices are expected in October. These notices will provide details about coverage termination dates.
Important Enrollment Dates
The Medicare Open Enrollment period runs from October 15 to December 7, allowing beneficiaries to switch plans or adjust drug coverage. Changes take effect on January 1. Affected members may also qualify for a Special Enrollment Period from December 8 to the end of February for plans discontinuing on January 1.
Next Steps for Members
Humana members should carefully review plan materials upon receipt of non-renewal notices. Key decisions include whether to stay with another Medicare Advantage plan or switch to original Medicare, potentially adding a Medigap policy and a separate Part D drug plan. Kevin Thompson points out that Medicare reimbursements are declining, possibly leading to more plans leaving the marketplace under government cost-saving measures.