The Centers for Medicare and Medicaid Services created a new problem for retirement advisors with risk-averse clients: The Medicare Advantage plan program could fall apart in 2027.
"Original Medicare" exposes enrolleees to many out-of-pocket costs, such as deductibles and coinsurance bills.
The Medicare Advantage program has been helping about half of the 70 million Medicare enrollees fill in the hole.
Agents and health insurers warned about the possibility of new federal marketing rules and subsidy changes wrecking the program in 2024 and 2025. Most clients avoided doom then.
Agents and health insurers also talked about severe turmoil occurring this year. Results for the annual enrollment period for 2026 Medicare plan coverage are still coming in.
The Centers for Medicare and Medicaid Services — the arm of the U.S. Department of Health and Human Services that runs Medicare — created a new wave of panic Monday, by announcing that it intends to hold average 2027 increases in federal payments to Medicare Advantage plan issuers to 0.09%, at a time when health care costs appear to be increasing almost 10%.
Investors sent the prices of the stocks of big Medicare plan issuers such as UnitedHealth plummeting, and executives from those companies have been emphasizing that they will "take a disciplined approach" to Medicare Advantage plan pricing.
For five points about the looming crisis for retirement advisors, see the gallery accompanying this article.
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