Radar on Medicare Advantage

The Inflation Reduction Act (IRA)’s $2,000 Part D spending cap, which took effect Jan. 1, is projected to help more than 11 million Medicare beneficiaries save $7 billion on prescription drugs, according to a new report from HHS’s Office of the Assistant Secretary for Planning and Evaluation (ASPE). 

Under the IRA, the out-of-pocket (OOP) threshold for Part D catastrophic coverage is now capped at $2,000 — down from $8,000, inclusive of manufacturer discounts on brand-name drugs — and will be adjusted annually for inflation. The IRA also included the elimination of cost sharing in the catastrophic coverage phase, which began in 2024.

As Medicare Advantage insurers saw increasing levels of utilization that coincided with shrinking reimbursement from CMS in 2024, this year’s plan offerings presented a level of change that consumers couldn’t ignore. In its newly released 2025 Medicare Shopping and Switching Study, Deft Research observed 23% of MA enrollees switching plans or carriers during the 2025 Annual Election Period (AEP) that ran from Oct. 15 through Dec. 7. That was up from 16% the year before, and it represented a return to an all-time high MA switch rate.

Given the service area reductions, plan closures, increased cost sharing and reduced benefits that consumers had to contend with, it’s not surprising to Deft Research President George Dippel that the figure was that high. That’s partly because 1.8 million individual, non-Special Needs Plan (SNP) beneficiaries saw their coverage terminated due to plan closures. “That number is very large; it’s the largest that I've seen in my 15 years here at Deft,” he tells AIS Health, a division of MMIT. It also represents an 8.7% “term” rate, compared with previous highs of 5%, “so that’s guaranteed switching, because these people were literally let go by the carrier.”

More than 4,000 stakeholders as of the Jan. 27 deadline had submitted feedback on a 700-plus page rule concerning the Medicare Advantage and Part D programs. Introduced by CMS under then-President Joe Biden, the proposed rule sought changes to marketing and communications, prescription drug coverage, health equity, utilization management and other aspects of MA and Part D. Some industry stakeholders took the opportunity to sound off on aspects of the program that weren’t addressed in the rulemaking, while others echoed the Donald Trump administration’s “Make America Healthy Again” rhetoric.

Better for Medicare Alliance (BMA), for one, urged the new administration to put off finalizing the rule while also delaying CMS’s previously announced plans to end the MA Value-Based Insurance Design (VBID) model at the end of this year.

The number of prior authorization (PA) determinations made by Medicare Advantage insurers has risen steadily in recent years as enrollment in MA has grown, according to a new KFF analysis.

In 2021, there were 37 million PA determinations, followed by 46 million in 2022 and nearly 50 million in 2023. The increase corresponds to the growing enrollment in MA plans, from 22 million in 2019 to 31 million in 2023.

Robert F. Kennedy Jr. on Feb. 4 passed a critical hurdle on his path to becoming the next HHS secretary and is likely to be confirmed. In a 14-13 vote along party lines, the Republican-controlled Senate Finance Committee cleared the way for a full Senate vote that as of AIS Health press time had not been scheduled. Despite intense questioning and skeptical closing remarks by Sen. Bill Cassidy, M.D., (R-La.) during a Jan. 30 hearing of the Senate Health, Education, Labor, and Pensions (HELP) Committee, Cassidy ended up casting his Finance Committee vote in favor of the politician. Although Cassidy said he and Kennedy are aligned on issues such as ultra-processed foods and obesity in the U.S., he expressed concern about Kennedy’s failure to unequivocally agree that vaccines save lives and do not cause autism. On Feb. 4, Cassidy said he discussed these concerns with Kennedy “multiple times over the weekend,” engaged in “in-depth conversations about the medical literature and the science behind the safety of vaccines,” and that “Kennedy and the administration reached out seeking to reassure me regarding their commitment to protecting the public health benefit of vaccination.” During both of Kennedy's confirmation hearings held last week, however, some Democratic senators expressed concern about his perception of Medicare and Medicaid. During his Jan. 29 hearing before the full Senate, for example, Kennedy incorrectly referred to Medicaid as being “fully paid for by the federal government” and indicated that the deductibles and premiums are too high. During the Jan. 30 HELP hearing, he failed to satisfy questions asked by Sen. Maggie Hassan (D-N.H.) about the differences between Medicare Parts A, B, C and D. When asked by Hassan to briefly define Medicare Part C (Medicare Advantage), he responded that it is the “full menu of all the services, A, B, C and D.” Kennedy also declared that he is enrolled in an MA plan and is “very happy with it.”