Two Medicare Advantage plans will cease operations in Vermont in January, leaving several thousand covered residents in the state in need of new coverage by the beginning of 2025.
The two plans, operated by MVP and WellCare, a subsidiary of health care giant Centene, will no longer be offered in the state — news that comes as insurers cut Medicare Advantage offerings nationwide.
UVM Health Advantage, a plan offered in partnership with the University of Vermont Health Network, was no longer financially viable amid an increase in medical utilization and regulatory changes, MVP and the UVM Health Network said. The plan currently covers about 6,000 Vermonters — roughly 11% of residents on a Medicare Advantage plan.
“It’s a difficult decision, one that we wish we didn’t have to make,” said Jordan Estey, MVP’s vice president of government affairs. “But as a small regional not-for-profit organization, the realities are the realities. And unlike some of our peers — you know, national for-profit plans — it’s more difficult for us to weather this type of financial impact in the short term.”
The plan will continue to operate in several counties in northern New York, Estey said, where it covers far fewer people.
A representative for WellCare could not be reached for comment Thursday afternoon. A company press release in August said that WellCare would not be offering Medicare Advantage plans in six states, including Vermont, in 2025.
As of September, Vermont had about 54,000 people on Medicare Advantage plans, according to data from the federal Centers for Medicaid & Medicare Services.
It’s not clear how many people are covered by WellCare’s Medicare Advantage plan. As of 2021, according to state data, WellCare covered only about 1,500 people — 6% of Vermonters on Medicare Advantage plans at the time.
The news comes just weeks before Medicare’s annual open enrollment period, which begins Oct. 15 and ends Dec. 7. The plans will continue to provide coverage until Jan. 1. Vermonters covered by the plans will need to return to traditional Medicare or choose another Medicare Advantage plan during that period to retain health insurance.
Public money and private insurers
Medicare Advantage plans are health plans operated by private companies — but paid for by the federal government — for people who are 65 and older or have a disability. Enrollment in Medicare Advantage plans has climbed swiftly over the past decade, with roughly half of Medicare members covered by a Medicare Advantage plan nationwide, according to data compiled by the Commonwealth Fund.
The percentage of eligible Vermonters choosing Medicare Advantage plans over traditional Medicare is lower than the national figure, at around 34%, but has been increasing steadily in recent years.
Unlike traditional Medicare plans, Medicare Advantage plans have a cap on annual out-of-pocket expenses. Most cover hospital and physician services as well as prescriptions and other care, such as vision or dental. Many Medicare advantage plans also offer benefits such as gym memberships, acupuncture or meal deliveries.
However, the plans have drawn criticism. Medicare Advantage plans have smaller provider networks than traditional Medicare, and the plans generally require more prior authorization, in which insurers must sign off on medical procedures before they can take place.
It also can be difficult for covered people to abandon their Medicare Advantage plan and switch to traditional Medicare, according to national media outlets.
A smaller market
The departures of MVP and WellCare will leave Vermont’s small Medicare Advantage marketplace even smaller. As of 2021, according to data, only three other insurers offered Medicare Advantage plans — UnitedHealthcare, BlueCross BlueShield of Vermont and Humana, the latter of which covered fewer than 50 people.
As of 2021, most Vermonters — about 70% — on Medicare Advantage plans were insured by UnitedHealthcare, according to state data. It was not clear how many people are currently covered by their plans. A UnitedHealthcare representative could not be reached for comment Thursday afternoon.
BlueCross BlueShield is set to continue to offer its Medicare Advantage plans in Vermont, spokesperson Sara Teachout said. Blue Cross’ enrollment figures were not immediately available.
But Teachout admitted that the plans have faced financial headwinds as the insurer weathers larger fiscal challenges.
“The challenges we’re seeing, really, are the rising costs of health care and increased utilization, and it’s across the board for all of our health plans,” she said.
Medicare Advantage plans also face challenges from federal tweaks to rules and payments. The 2022 Inflation Reduction Act, for example, implemented a series of reforms for Medicare, including lowering all members’ maximum out-of-pocket prescription costs to $2,000 a year and capping costs of certain drugs and vaccines.
“These are all incredibly pro consumer, pro patient changes, right?” Estey, of MVP, said. “But those were effectively funded by passing the costs on to the health plans, without reflecting those added costs in the rates.”
Read the story on VTDigger here: 2 Medicare Advantage plans will no longer be available in Vermont in 2025.