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The Future of Medicare Advantage and Fair Competition

Medicare Advantage has been rising in popularity in recent years. According to the Centers for Medicare & Medicaid Services, in 2024, 33.8 million enrollees constitute Medicare Advantage. Medicare Advantage has taken more than half a share of the Medicare Marketplace, making up for over 50% of Medicare plans. The May Congressional Budget Office (CBO) estimates that the plans will make up 62% of all Medicare plans in 2033.

It comes as no surprise that big healthcare providers such as UnitedHealthcare and Humana have seen tremendous growth in beneficiaries that use these types of plans nationwide.

However, there are many questions concerning whether the current benefits will continue in the future with the growing demand from consumers and providers valuing their profit margins.

Wall Street Journal recently published the article "Your Medicare Plan Might Not Include as Many Freebies Next Year", which focused on the possibility of benefits being cut from these plans. Providers may be incentivized to cut back on certain benefits, including gym memberships or dental, that are a part of most Medicare Advantage plans.

CMS has assured that in 2024 Medicare Advantage and Medicare Prescription Drug Programs will remain stable. But what initiatives are they taking to do so?

On November 6, 2023, CMS proposed a rule that would promote healthy competition and safeguard Medicare Advantage plans to cater to their beneficiaries. These benefits would protect the recipient of Medicare Advantage to acquire the proper healthcare providers and supplemental benefits. The goal of CMS is to create "fair competition" between Medicare Advantage and other plans such as Original Medicare. There can be financial incentives for agents or brokers to lean clients towards Medicare Advantage plans since they can get larger commissions, but this can go against the client's best interest, as the plan recommended should reflect their own healthcare needs. CMS has made several efforts to create fixed compensations regardless of whichever plan the broker/ agent sells. These policies reflect the Executive Order signed in July 2021 by President Biden to ensure fair competition in the Medicare Marketplace.

It appears the problem resides in benefits not matching or corresponding between different health insurance plans. A lot of consumers have favored Medicare Advantage for its monthly copayment, which tends to come out to a smaller total than other plans that consist of larger hospital bills. At the end of the day, plans should have similar benefits and be regulated to ensure that there are different options for different consumers, otherwise, they will be forced to rely on one primary plan that may or may not fit their needs.