The biggest Medicare Advantage insurers want to cut benefits, increase premiums and make other structural changes to their plans next year to address higher-than-expected medical costs this year.
Humana disclosed in a Securities and Exchange Commission filing on Friday that claims for inpatients, emergency department visits, outpatient surgery and dental services are at higher-than-expected levels. ants. Humana also reported that its Medicare Advantage enrollment grew faster than expected, especially among new people who were eligible for the plan. Humana previously noted that new Medicare beneficiaries have less profit than those transferring from other Medicare Advantage providers because their risk codes have not been collected.
Humana expects trends in higher costs to persist throughout the year, and aims to offset them by reducing income and investment reserves, and cutting some administrative functions. The company has included these cost considerations in its Medicare Advantage bids for the next plan year, which is expected to be launched by regulators on June 5.
The company did not immediately respond to a request for an interview.
Humana, the second-largest Medicare Advantage provider with 5.6 million members, recorded an 11.1% enrollment increase for the current five plans, well above the industry average. UnitedHealth Group is the largest Medicare Advantage provider with 7.5 million members. UnitedHealth Group and Humana combine to capture 46.5% share in the lucrative Medicare Advantage market.
UnitedHealth Group also reports that its Medicare Advantage members are scheduling more doctor visits than expected. After deferring care during the COVID-19 pandemic, older adults are returning to outpatient centers for hip, knee, heart, and other surgical procedures at high rates. rate was “significantly higher” than expected, Chief Financial Officer John Rex said during the Goldman Sachs Global Healthcare Conference on Wednesday.
“There are some indications that it looks like a pent-up or delayed need has been satisfied,” says Rex.
UnitedHealth Group has reassured investors that it has enough reserves to cover medical expenses, and it has priced in these trends in its Medicare Advantage bids for 2024. The company did not immediately respond. interview request.
Increased utilization isn’t the only thing Medicare Advantage insurers consider when structuring bids for next year.
Regulators tightened the way private Medicare plans are audited, paid and quality reviewed, prompting some insurers to say they would reduce additional benefits. The Centers for Medicare and Medicaid Services have also revised their risk-adjusted model, although both UnitedHealth Group and Humana say their three-year period gives them enough time to adapt.
