Humana is set to terminate specific Medicare Advantage plans, impacting around 600,000 members who must assess their healthcare options before 2027. The company announced that this decision is part of a strategy to improve profitability by discontinuing underperforming plans. Celeste Mellet, Humana’s CFO, mentioned during a July 29 earnings call that the company aims to regain a significant portion of these members, similar to its efforts in 2025.
Those affected will not lose their Medicare eligibility but must choose new coverage if their current plan is not renewed. Humana has been reached out for comment by Newsweek via email.
Significance of the Decision
Humana ranks as one of the largest Medicare Advantage insurers in the U.S. The termination of plans affecting 600,000 members marks a significant change for 2027. Medicare Advantage plans often offer retirees comprehensive access to doctors, prescription drug coverage, and additional benefits. The cancellation of these plans may require beneficiaries to switch doctors, review drug coverage, or decide between Medicare Advantage and original Medicare.
Details to Note
During the July 29 earnings call, Humana disclosed plans to end specific Medicare Advantage options, affecting approximately 600,000 members. The focus is on less profitable plans to boost financial outcomes. Drew Powers from Powers Financial Group explained that for-profit insurance companies run Medicare Advantage plans, requiring profit margins to sustain operations. This could lead to policyholders being dropped if not deemed profitable.
Humana has indicated that some affected members might continue with the company by switching to other Humana Medicare Advantage plans. The company anticipates a recapture rate over 40%, like past exits in 2025. However, available coverage options will depend on location.
What If Your Plan Ends?
Beneficiaries of discontinued Medicare Advantage plans will not lose Medicare coverage. They must select new coverage for the following year. Those who do not choose another Medicare Advantage plan will typically revert to original Medicare once their current coverage ends.
Kevin Thompson, CEO of 9i Capital Group, noted that as plans exit the marketplace, industry consolidation could lead to reduced competition, resulting in higher prices or diminished plan offerings.
Members should expect formal Plan Non-Renewal Notices, informing them their coverage will not continue into the next year. These notices usually arrive in October and outline when current coverage ends.
Key Enrollment Deadlines
Medicare Open Enrollment spans from October 15 to December 7 annually. During this time, beneficiaries can switch Medicare Advantage plans, transition to original Medicare, or change prescription drug coverage. Changes typically start on January 1. Affected members might also qualify for a Special Enrollment Period if their plan is not renewed. This period lasts from December 8 to February’s end for plans ending on January 1.
Next Steps
Affected Humana members should examine plan materials closely when non-renewal notices arrive. These documents will specify if a beneficiary’s plan is ending and outline available alternatives. A crucial decision for many retirees will be whether to enroll in another Medicare Advantage plan or return to original Medicare, possibly paired with a Medigap policy and a standalone Part D prescription drug plan.
As Medicare reimbursements decline and potential government cost-saving measures remain a focus, plans may continue exiting the marketplace, according to Thompson.