The Medicare Advantage plan market got through the recent annual enrollment period upheaval more or less intact — but more upheaval may be coming during the AEP for 2026 coverage that starts in the fall.
Vijay Kotte, the CEO of GoHealth, a web broker active in the Medicare plan market, predicted that rising medical claim costs will lead to a new round of Medicare plan rate increases and menu changes in 2026.
"While we continue to anticipate positive market dynamics, our outlook has evolved," Kotte told analysts during a conference call the company held to go over earnings for the first quarter, which ended March 31. "We anticipate another disruptive AEP."
GoHealth posted a recording of the call on its website.
What it means: Clients who still have Medicare Advantage plan coverage that's similar to what it was in 2024 will not necessarily enjoy that same level of coverage stability next year.
Medicare Advantage: The Medicare Advantage program and a rival program, the Medicare supplement insurance industry, give health insurers ways to help the 64 million Medicare enrollees fill in most of the gaps in Original Medicare coverage, such as high deductibles and big coinsurance bills.
Medicare Advantage plans, which operate under federal rules and are regulated by the federal Centers for Medicare and Medicaid Services, have about 34 million enrollees.
Medigap policies come under the jurisdiction of state insurance regulators. They cover about 15 million people.
The annual enrollment period for Medicare Advantage plans runs from Oct. 15 through Dec. 7 each year.
2025 enrollment: The 2025 Medicare Advantage enrollment period was rocky partly because a new federal law changed the benefits design rules for prescription drug benefits and partly because CMS tried to rein in federal spending on Medicare Advantage subsidies by tightening federal funding rules.
CMS also tried to eliminate insurers' ability to pay for support services for Medicare plan agents and brokers. CMS ultimately let the support services payment ban die in court, but the uncertainty lingered until June and might have intensified other problems.
Many issuers increased rates and narrowed the range of plans they offered. Some withdrew from the Medicare Advantage plan market in some or all states.
Medicare Advantage plan enrollment ended up increasing slightly, but many enrollees ended up having to change plans.
The disruption ended up increasing sales volume at GoHealth, and at competitors such as eHealth and SelectQuote, because more Medicare enrollees needed help with understanding the changes and finding new coverage.
This year: Carriers noticed that enrollee claims started to run high in the fourth quarter of 2024, possibly because of issues such as a bad flu and COVID season, preventive care skipped during the worst years of the COVID pandemic and health care providers' efforts to make up for the financial hit they took during the worst years of the COVID pandemic.
Some carriers stopped paying sales commissions, or stopped paying commissions on policies sold outside the normal AEP through "special enrollment period" arrangements.
One big carrier, Elevance Health, stopped paying sales commissions and stopped letting agents help clients submit applications through the standard digital systems.
At least carriers seem to be seeing claims continue to run higher than expected this year. Elevance Health, for example, has decided not to make its application for coverage available through electronic systems.
When carriers reported their earnings for the first quarter, some said claims had been higher than expected.
UnitedHealth said in April, when it released earnings for the first quarter, that Medicare Advantage plan participants' use of care had increased about twice as fast as expected. The company then said Tuesday that claims for physician and outpatient hospital services have been so much higher than it had expected that it's withdrawing the 2025 performance forecast it had originally released.
Kotte's perspective: Kotte said the commission changes and related changes mean that many issuers will have to re-price their plans to correct problems with profit margins.
GoHealth is preparing for "another dynamic shopping season in the fourth quarter," Kotte said.
One analyst, Rob McGuire of Granite Research, asked Kotte about the UnitedHealth announcement.
"Across the country, there has been no deficit of health plans describing some of their margin challenges," Kotte said.
The announcements and commission changes "lead us to believe that there are going to be more benefit adjustments going into the next AEP," Kotte said. "And that's going to cause more demand for shopping and more demand for help with comparing options."
Credit: Centers for Medicare and Medicaid Services
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.