Insurers cut back on Medicare Advantage
Funding cuts to Medicare will affect Minnesota residents, with UnitedHealth exiting primarily in the southern part of the state. FOX 9’s Mike Manzoni has the latest updates.
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John Galvin knows he needs a colonoscopy. But he has not scheduled the procedure until December, when he turns 65 and becomes eligible for Medicare.
He was already thinking about delaying it, he said at the time, when his monthly Obamacare premium payments tripled this year to $2,460, about a third of his income. Additionally, with a $2,700 deductible, he would have to undergo most of the diagnostic tests himself, making the financial hit difficult to bear, he said.
“It would cost close to $3,000,” said Galvin, who lives in North Kingstown, Rhode Island. Ms. Galvin recently retired as a director of a durable medical equipment company. “It has been postponed.”
Galvin said he and his wife, Nancy, are putting off expensive CT scans for a few years until they qualify for Medicare so they can cover the cost. The federal health program covers all Americans age 65 and older.
People in Affordable Care Act plans who are nearing retirement age experienced some of the biggest increases after enhanced federal aid expired at the end of December. People with incomes above 400% of the federal poverty level ($86,560 for a family of two) have been receiving help paying for the plan since the Biden administration expanded subsidies during the coronavirus pandemic. Approximately half of ACA enrollees were adults between the ages of 50 and 64.
Without federal funding right now, some people in this age group say they’re wondering whether to delay treatment until they qualify for Medicare.
Delaying treatment can increase costs and health risks
Patient advocates, doctors and health policy researchers say this not only puts physical health at risk, but could simply shift costs, leaving taxpayers to spend even more money to fix health problems that worsen in the delay.
“There’s going to be a lot of unmet demand and unmet need,” said Jessica Schubel, a health policy consultant who worked in the Obama and Biden administrations. “Medicare will be spending a huge amount of money to cover and accommodate their care.”
The Affordable Care Act is an important source of health insurance for people ages 50 to 64, according to AARP, a lobby group representing seniors. Access to Obamacare plans would cut the uninsured rate in this age group by half. This led some people to retire early while maintaining their coverage.
It has also provided a safety net for small business owners and people with jobs that don’t offer health insurance. Last fall, the longest government shutdown in history occurred as Democratic efforts to expand subsidies failed. Republican lawmakers opposed to the extension argued that the aid would be directed toward insurance companies and encourage fraud and wasteful coverage.
Greg Keller, a Republican strategist with Atlas Strategy Group, said the issue will remain politically relevant, especially among older Americans who are more likely to turn out to vote in this year’s midterm elections.
“Is affordability an issue? Yes,” he said. “Are medical prices factored into that? Yes.”
A 2024 University of Michigan poll found that even before the subsidies expired, the cost of medical care, nursing homes, and prescription drugs were among the top health-related concerns for people 50 and older. Middle-aged adults with Obamacare plans are feeling the pinch of expiring subsidies. That’s because the ACA allows insurance companies to charge adults in their 60s, who typically use less health care, up to three times as much premiums as those in their 20s.
And many middle-aged adults are already enrolled in the lowest-cost plan available, leaving them without affordable options to turn to, said Matt McGaugh, a policy analyst at KFF, a health information nonprofit that includes KFF Health News.
“This is very disastrous for older marketplace registrants,” he says.
People who earn a few dollars more than 400 percent of the federal poverty level currently earn too much to qualify for subsidies, and in some states their average premium payments would have been at least tripled.
Many people are experiencing rate increases of thousands of dollars a year, and their total premium payments amount to as much as a quarter of their income. John Ayanian, a primary care physician and health policy researcher at the University of Michigan, said he regularly speaks with older patients who are wondering how they can cover their medical costs. He said some people in their early 60s may opt out of ACA coverage because of rising premiums.
“It’s a gamble,” he added.
Marcy Heinbaugh might take that gamble. The 63-year-old social services worker in rural Illinois said his monthly premium payments more than doubled from about $1,100 to $2,333 on a plan with a $10,150 out-of-pocket maximum.
She said she knew she would be paying more, but she didn’t expect it to be this big. Now, several months later, she’s not sure if she’ll stick with that plan for the rest of the year. She said she might become uninsured.
“I cringe just thinking about it,” Heinbaugh said.
“An impossible choice”
Alan Weil, AARP’s senior vice president for public policy, said people want to buy their insurance on the marketplace, and many middle-aged adults can afford it with a little federal financial aid. People who opt out of insurance or delay care until they reach age 65 may save money now, but it could end up costing them, and taxpayers, more money down the road.
“As people approach retirement, the so-called savings associated with subsidy reductions are likely to end up increasing the cost of using Medicare,” Weil said.
Medicare enrollees are also not immune to rising costs. In January, for example, standard Medicare Part B premiums rose from $185 a month to nearly $203 a month.
Until Galvin enrolls in Medicare, he said he plans to use up his $30,000 retirement account to cover premium payments and deductibles for the marketplace plan.
A 2024 AARP survey found that one in five adults over age 50 has no retirement savings, and three in five worry they don’t have enough retirement savings to support themselves.
Health policy researchers said the expiration of these Obamacare subsidies will put additional financial pressure on Americans nearing retirement.
“People are being forced to make impossible choices,” said Natalie Keene, director of federal health advocacy for the national nonprofit Justice in Aging.
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