Medicare Advantage has steadily grown over the past decade, and now encompasses more than half of all seniors eligible for Medicare. However, over the past year, the industry has faced significant headwinds, which as stymied some payers’ expansion plans. These challenges range from regulatory changes impacting payments to an ongoing spike in utilization that has led to skyrocketing medical loss ratios.
While any changes in enrollment stemming from the latest sign-up window — which closed on Dec. 7 — aren’t yet clear, experts don’t expect attention on the program to wane. “The program continues to experience significant growth, despite regulatory challenges and other headwinds going into next year,” Greg Gierer, principal with Health Management Associates, told Fierce Healthcare. “With the new administration coming in, I think there’s going to be significant policy attention to Medicare Advantage.”
And while open enrollment has completed, Medicare Advantage is still in a busy time for regulatory change, Gierer said. For example, the Centers for Medicare & Medicaid Services released its annual Advance Notice governing Medicare in late November, and while a proposal for expanded coverage for weight loss drugs was the headline, the rule suggests other key changes, too.
For one, the rule includes a slew of changes aimed at addressing challenges with prior authorization. It establishes certain benefits that plans are expected to cover, and would require MA plans to establish a utilization management committee that oversees protocols.
It also tackles provider directories by requiring that plans provide searchable network information for inclusion in the Medicare Plan Finder.
“It’s always a busy time of year for Medicare Advantage, sort of the annual rulemaking cycle, but with the change in administration, I think it even gives greater intensity to it,” Gierer said.
How the incoming Trump administration could tackle Medicare Advantage isn’t entirely clear, but his pick to lead CMS, Dr. Mehmet Oz, does offer some clues. In his 2022 campaign for Senate in Pennsylvania, he backed privatizing the Medicare program and instead leaning on MA.
He’s also an investor in UnitedHealth Group, the largest insurer in the MA space. Leading Democratic lawmakers this week lambasted Oz over this perceived conflict of interest.
That said, healthcare issues were not central topics to the presidential campaign, and Trump hasn’t laid out a specific policy plan around MA or healthcare. The president-elect said on the campaign trail that he has “concepts of a plan” around the Affordable Care Act.
Larry Levitt, executive vice president for health policy at KFF, wrote in a quick take piece that polices highlighted in 2020 suggest changes to the ACA and Medicaid are likely, but it did not take note of implications for Medicare Advantage.
Jeannie Fuglesten Biniek, associate director of the program on Medicare policy at KFF, told Fierce Healthcare that there are few indicators of Trump’s planned direction to work from beyond broad statements around not cutting Medicare.
“Certainly, the Biden administration should put out a lot of new policies in the proposed rules. I would not necessarily expect those to finalize,” she said. “But in terms of making changes to the existing rules, I think it’s really an open question that’s hard to really predict.”
Gierer said that while the incoming administration is likely to be friendlier to the industry in some respects, including potentially around payments, the scrutiny of MA as it has grown has been bipartisan.
Policymakers on both sides of the aisle have been skeptical of prior authorization and other utilization management techniques as well as marketing strategies.
“I think even though there’s a new administration come January, I think for Medicare Advantage that continues and you should expect a continued policy focus on making the process work better for beneficiaries and improving the care experience,” he said.
A major draw for Medicare Advantage is the supplemental benefit offerings that these private plans can provide, ranging from dental and vision coverage to pharmacy benefits to programs targeting the social determinants of health. And while those benefits have largely grown with the program, payment rate cuts for the 2025 plan year led some insurers to pull back in certain markets or nix additional benefits to save on costs.
Fuglesten Biniek said that without the open enrollment data available, it’s hard to say how those benefit cuts may have impacted seniors. But how that impacts plan selection, or if it drives some beneficiaries back into traditional Medicare, will be a trend to watch, she said.
“I do think there was maybe a bit more attention this year on the plans that are available, and while it was more or less stable in some areas of the country, there were substantially fewer plans available, and certain benefits were not offered as often,” she said. “So I am curious to see how people sorted themselves between plans that may have changed their benefits from 2024 to 2025.”
Ali Khan, M.D., Medicare Chief Medical Officer for Aetna, told Fierce Healthcare in an email that beneficiaries are also seeking more information on how to best use and access their benefits.
“While supplemental offerings have expanded over time, dental and vision benefits and Extra Benefit Card allowances remain top of mind for most people looking for a Medicare plan,” he wrote. ”Members want clarity on what services are covered by these benefits, allowance limits and how to use them.”
Another area of contention in MA under the Biden administration has been the program’s star ratings, which are critical in setting quality bonus payments and driving interest in certain plans. Large MA plans saw a drop off in star ratings that led to a number of lawsuits, which forced recalculations on CMS’ end.