Ask the Medicare Specialist

As I mentioned in Part 1, I’ve been in the Medicare insurance Industry since 2007, which was the infancy of Advantage Plans. It’s been interesting to watch and be a small part of its growth to the over 35 million Americans who are enrolled today.
It’s somewhat amazing that premiums have actually gone down since 2018. Co-pays have also remained very steady as well. Prior to 2019, there were still many $0 plans, but the most popular ranged from $50 to just over $80 per month. Today, the most popular plans cost between $20 to $35 per month. Also, from 2009 until 2018 there were very few, if any, ancillary benefits or “extras.” Not a single plan offered comprehensive dental, OTC benefits, or food allowances that many plans provide today and has made them so popular.
How is it possible with inflation hitting every aspect of our lives, hearth insurance and health care included, that Advantage Plans got less expensive with better benefits? The answer is that subsidies to the private insurance companies were greatly increased and until 2024 companies were more profitable than ever.
However, that took a sharp turn in mid-2023 when the Advantage Plan insurance companies got hit with a very large increase in claims. It was first thought that the much higher volume of claims was due to people putting off getting tests and procedures during COVID that were now being rescheduled and performed. However, the trend continued into 2025 and insurance companies profits dipped sharply.
One very significant and unwelcomed change in Advantage Plans occurred in 2025, the introduction of Part D prescription drug deductibles. Only select companies and plans implemented them in 2025, but in 2026 I estimate that 90% of plans have a drug deductible of up to $615 on Tier 3 through 5 drugs. In addition, in 2024 and prior, co-pays for the most common brand name Tier 3 drugs were only $40 to $45 for a 30-day supply. Now on almost all plans the cost has ballooned to 20% to 25% of the retail. This resulted in a significant increase in out-of-pocket costs for brand name medications of around $1,500 per year!
What does the future hold for Medicare Advantage Plans?
Medicare Part A is in big financial trouble and is estimated to be insolvent by 2033, only seven years from now. Because much of Medicare Advantage funding comes from Part A, I believe the subsidies paid to insurance will no longer be increased to keep up with the higher claims rates and medical inflation. As I explained in previous editions of this series, Advantage Plans cost taxpayers 20% more than Original Medicare, totaling almost $100 billion dollars a year! It’s very controversial. I don’t see a scenario where this huge additional cost to taxpayers for the Medicare Advantage program can continue considering the dire financial situation of Part A.
What this is likely to mean to consumers in in the years to come is a correction back to what plans looked like prior to 2019 with higher premiums, co-pays, and Maximum Out of Pocket (MOOP) along with fewer and less generous ancillary benefits.
I’m also concerned that networks may shrink. And to get plans with lower premiums and co-pays people in Western Pennsylvania may have to sacrifice having access to both UPMC and AHN heath systems, choosing one the other. Those who aren’t willing to that will pay more for plans with higher co-pays.
I know it’s not the news people want to hear, but when insurance companies profits go down or even faces with losses, which many have been the last two or three years, they have to take steps to remain in business and profitable.

How does this effect what decisions people currently on Advantage Plans do during the next Annual Election Period?
The last five years, the “Big Three,” as I call the Advantage Plan companies who have about 90% of the market share in Western PA, have all been so competitive and similar in plan value, there was very little movement from one to another. However, that may change as well and people will want to be more diligent in shopping each and every Annual Election Period.
What I’ve also been encouraging people who are relatively healthy and can pass medical underwriting to do is consider going to a Supplement now, while you still can. As I explained in Part 3, 6 to 12 months after an initial Part B effective date, Supplement companies are allowed to discriminate on who they accept into their plans. Those who have certain current or pre-existing health conditions will be denied a policy. Those who can be accepted into a Supplement might not want to wait. In fact, Open Enrollment runs through March 31st. Up until that date, people can leave an Advantage Plan and enroll in a Supplement. I’ve been encouraging people to at least explore this option and get some facts regarding Supplements and how they differ from Advantage Plans.