WHY ARE MEDICARE AD COSTS GOING UP IN
If you’re on a Medicare Advantage plan, you might be wondering why it feels like things are getting more expensive in 2025. You're not alone! Let’s walk through what’s happening, why, and what it means for you.
WHAT IS A MEDICARE ADVANTAGE PLAN? Medicare Advantage (MA) plans are health plans from private insurance companies approved by Medicare. They combine hospital (Part A), medical (Part B), and usually drug (Part D) coverage into one plan. Most MA plans have networks of doctors and hospitals, and may offer lower out of pocket cost. But you still pay your Part B monthly cost and possibly deductibles, copays, or coinsurance when you use services. SO, WHY ARE COSTS INCREASING IN 2025? Medicare Advantage plans may lower out of pocket plans, but other costs like deductibles and copays are rising. According to eHealth, nationwide average deductibles for MA plans have more than doubled. And if you have a drug plan, your Part D monthly cost is about 24% higher than last year. This is certainly true in our area.
Even though all these costs have increased, payments to doctors from Medicare and MA plans haven’t. According to the American Medical Association (AMA), 2025 will be the fifth straight year with no pay increase for doctors under Medicare. When pay stays the same but costs increase, providers are forced to do more with less.
WHY DOCTORS DON’T LOVE MEDICARE ADVANTAGE. Here’s where it gets tricky.
Doctors often get paid less by Medicare than by private, employer- sponsored insurance. And many say Medicare Advantage pays even less than Original Medicare.
That means:
• Doctors earn less for seeing Medicare Advantage patients. • Administrative hassles are higher. MA plans often require "prior authorization" before covering treatments or procedures. • Some doctors opt out of MA networks or refuse to take certain plans. This doesn't mean MA plans are bad — many are great for patients. However, the system makes it hard for doctors and clinics to stay afloat, especially in smaller or rural areas.
What’s driving this?
• Inflation: Just like groceries and gas, medical care is more expensive. Doctors, hospitals, and insurers pay more for staff, supplies, and equipment. That gets passed on to you. • Post-pandemic demand: People are catching up on doctor visits, surgeries, and treatments they postponed during COVID-19. More people needing care means higher costs. • Plan design changes: To keep monthly costs low, insurers are raising other costs like deductibles or copays. Many drug plans are adding new deductibles, even if they didn't have them before. • Rising insurance payments: Medicare increased what it pays insurers to run MA plans by 5.06%. Many insurers are using that money to protect the plans and/or add benefits, not reduce what you pay out-of-pocket. HOW INFLATION AFFECTS HEALTH CARE. Inflation means everything costs more, including health care. Here’s how: • Doctors and nurses: Medical staff need raises, too. Staff costs are a big part of a medical office’s expenses. • Medical supplies: Prices have increased for everything, from Band-Aids to MRI machines. • Utilities and rent: Clinics and hospitals pay electric bills and rent like we do, and those costs have climbed.
2 • OmahaInsuranceSolutions.com
Made with FlippingBook Ebook Creator