Annual Election Period/AEP

“Truly shocking” and “huge setback” were just two of a flood of analyst reactions to Humana Inc.’s Oct. 2 disclosure that its percentage of Medicare Advantage members in plans with 4 or more stars will plummet to 25% next year. That’s down from an estimated 94% for 2024 and is largely the result of a decline in Star Ratings for its largest contract, according to a new filing from Humana. Although the full set of Star Ratings data won’t be released until next week, this development confirmed industry fears that rising cut points will diminish ratings — and related revenue.

In advance of the Medicare Annual Election Period that starts on Oct. 15, preliminary Stars data became available in the CMS Medicare Plan Finder on Oct. 1. According to Humana’s filing with the U.S. Securities and Exchange Commission (SEC), contract H5216 fell from a 4.5-star rating to a 3.5-star rating for next year, which impacts quality bonus payments in 2026. That contract holds approximately 45% of Humana’s MA membership, including more than 90% of its group MA membership, Humana clarified.

In its annual release of key premium, benefit and plan information for Medicare Advantage and Part D, CMS on Sept. 27 emphasized stability and robust offerings for 2025, despite repeated warnings from industry trade groups and plans of anticipated benefit reductions in the face of revenue challenges. While emerging analyses tell a slightly different story — that of insurers pursuing higher deductibles and/or maximum out-of-pocket cost amounts to maintain, for example, competitive premiums — industry experts say these early comparisons only tell part of the story, as other yet-to-be released data will convey additional nuances of MA and Part D market changes.

Amid reports of increasing prior authorization (PA) requests and coverage denials, dozens of hospitals and health systems are exiting or threatening to exit insurers’ Medicare Advantage networks. Although some departures have already taken effect, many will impact the 2025 plan year, which MA insurers have begun promoting in advance of the Annual Election Period (AEP). While on the surface the disputes reflect providers’ growing frustrations with insurers’ PA policies, two industry experts say hospitals’ latest round of muscle-flexing may reflect a trend of health systems looking more strategically at their markets and seeking the best deals.

As of Oct. 1, Becker’s Hospital Review had counted at least 27 health care providers nationwide that have unveiled MA network departures this year. And that is not an exhaustive list, as additional reports of providers joining the exodus continue to pour in from local news outlets across the U.S.

The countdown is on until the 2025 Medicare Annual Election Period (AEP), which runs annually from Oct. 15 through Dec. 7, and Medicare Advantage plans are anxiously awaiting intel on how their competitors responded to upcoming Medicare Part D changes stemming from the Inflation Reduction Act (IRA). And while marketing rules remain largely unchanged this AEP — thanks to a district court putting CMS’s plans to restructure broker compensation on hold — the 2025 AEP is likely to throw plans more than a few curveballs.

Those were just some of the takeaways shared by industry veterans during an Aug. 22 webinar, “2025 AEP Sales Strategy in the New Regulated Environment,” which was co-hosted by EvolveNXT and Rebellis Group.

After major insurers reported second-quarter financial results that reflected continued medical cost pressure in the government business, analysts revisited their takes on expectations for CVS Health Corp.’s Aetna, Centene Corp. and industry peers. Two notable factors driving some of the headwinds in the back half of the year are the 2025 Medicare Annual Election Period (AEP), which kicks off on Oct. 15, and the impact of Medicaid redeterminations. The latter was of particular concern to analysts after Sept. 4, when Centene provided an update at the Wells Fargo Healthcare Conference signaling lower-than-expected Medicaid enrollment.

For managed care organizations with a large Medicaid footprint, the consistent takeaway for Barclays after second-quarter earnings reports was “incremental trend pressure relative to current expectations,” stemming from redeterminations picking up in the first half of the year “that put increased acuity pressure on state rates,” wrote equity research analysts on Aug. 22. “From here, membership should start to stabilize, which is the first step toward recovery.”

Centene Corp. late last month riled agents and brokers with the news that it would no longer pay new and renewal commissions for enrollments in its stand-alone Prescription Drug Plan (PDP) products. During a Sept. 4 presentation at the Wells Fargo Healthcare Conference, Centene executives for the first time publicly acknowledged the firm’s controversial decision.

“One important thing to note on PDP, partly because of the IRA [Inflation Reduction Act] changes and then final rate notice provisions at the time that we filed bids, we made the difficult decision to eliminate broker commissions this year for PDP only,” Centene CEO Sarah London emphasized during the conference. She added that “we'll continue to pay full commissions in Medicare Advantage and obviously work very closely with the broker community to support the work they do, to support our members.”

In an email to contracted brokers on Aug. 23 that has now stirred considerable controversy, Centene Corp. said it would no longer pay new and renewal commissions for enrollments in its stand-alone Prescription Drug Plan (PDP) products.

For insurance agents who previously enrolled clients in a Centene/Wellcare product and anticipated putting time and resources into continuing to serve that client, the rug was effectively pulled out from under them. Fearing that the move could set a dangerous precedent, the broker community over the last week has rallied to voice its objections and demand answers from the leading PDP carrier.

Along with other major changes to the Medicare Part D benefit, beneficiaries starting next year will have a $2,000 limit on their annual out-of-pocket (OOP) prescription drug costs, thanks to the Inflation Reduction Act (IRA). If seniors find themselves uncomfortably close to that threshold, they also can smooth those OOP costs over the course of the 2025 plan year through the IRA-established Medicare Payment Prescription Plan (M3P) program. While sources agree the program has the potential to improve access to prescription drugs, they say its success is also largely dependent on how well plans inform patients that the option is available.

As CMS applies pressure on health plans and states to enhance coordination for dually eligible Medicare-Medicaid enrollees and as congressional lawmakers urge momentum for the Delivering Unified Access to Lifesaving Services (DUALS) Act, the path to integrated care remains a challenge in many states. And two recent studies show that beneficial outcomes, even for enrollees in Dual Eligible Special Needs Plans (D-SNPs), are not guaranteed.

In separate analyses looking at the New York and Virginia markets, researchers discovered a wide range of improvement areas that, even among highly integrated D-SNPs (HIDE-SNPs) and fully integrated D-SNPs (FIDE-SNPs), could capitalize on the potential of the D-SNP approach. The study covering the Virginia market, published last month in JAMA Health Forum, analyzed the impact of exclusively aligned enrollment (EAE), which the study authors describe as “the highest level of D-SNP integration.” This occurs when the parent organization’s D-SNP (a type of Medicare Advantage plan) is limited to individuals who are also enrolled in that organization’s Medicaid managed care organization.

Medicare Advantage insurers and the agents and brokers who sell their plans got a temporary reprieve this month when the U.S. District Court for the Northern District of Texas granted a stay in two cases seeking to stop CMS from implementing new agent and broker regulations. Sources say this means the previously finalized restrictions on payments and contract terms will not take effect for the 2025 Annual Election Period, which starts on Oct. 15 and is preceded by official marketing activities beginning Oct. 1, but they advise plans to consider implementing compliant arrangements for plan year 2025 in case things go awry.