Medicare Advantage options narrow as insurers cut back
Increasing healthcare costs are one of the reasons insurers are discontinuing Advantage plans or reducing coverage. Credit: iStock
Thousands of Long Islanders on Medicare Advantage will lose their plans at the end of the year, and their alternatives often include policies with less coverage and higher out-of-pocket expenses.
The drop in available plans on Long Island and nationwide for 2027 continues a trend that began in the 2025 plan year, and is rooted, experts say, in increasing healthcare costs, less generous federal payments to insurance companies and insurers’ desire for profits.
Some Long Islanders "have been dropped two or three consecutive years, and it’s hard for them to comprehend why this keeps happening," said Paul Barrett, principal agent for the Melville-based Modern Medicare Agency, which helps Medicare recipients wade through coverage options.
In 2024, there were 34 Medicare Advantage plans in Suffolk County, Barrett said. In 2027 there will be 15, down from 22 this year, not including those that serve "special needs" populations, such as those on Medicaid or with certain chronic conditions or that lack prescription drug coverage, according to KFF, a health policy and research nonprofit. In Nassau, the number of plans is dipping to 25, from 26 this year.
WHAT NEWSDAY FOUND
- Thousands of Long Islanders are losing their Medicare Advantage plans as of Jan. 1 and will need to shift to another Advantage plan or original Medicare.
- The drop in plans is part of a trend that began in 2025. Experts say higher healthcare costs, less generous federal payments to insurers and insurers’ desire for profits are among the factors.
- Remaining Advantage plans for 2027 in many cases have higher out-of-pocket costs and less expansive coverage than this year.
Medicare Advantage plans are issued by private insurance companies that receive federal payments to provide care, while original Medicare is run by the federal government. About 55% of Medicare recipients are on Medicare Advantage, according to KFF.
People on original Medicare have their choice of any provider that accepts Medicare, but many Advantage plans offer only a limited network of providers.
Elizabeth W., 65, of Huntington Station, who asked not to publish her full name for privacy reasons, received a letter from EmblemHealth that canceled her dual Medicare-Medicaid Medicare Advantage plan.
Elizabeth’s biggest priority was keeping her doctors, she said as she spread out pages of insurance documents on a table at the Town of Huntington Senior Center. Her broker found her one.
Every year, the senior center brings in Medicare advisers for one-on-one sessions to explain options, because the choice of plans depends on individual needs and preferences, said Julia Frangione, director of the town’s senior division.
"It’s daunting when you look at all the plans and options," she said.
A state-coordinated program connects Medicare policyholders with insurance counselors: 800-701-0501. Medicare open enrollment continues through Dec. 7.
Shrinking options
Medicare Advantage plans are not the only ones being canceled.
Most people with original Medicare have Part D prescription drug plans, and the number of such plans has been declining for two decades, with the trend accelerating in the past two years, a KFF analysis shows. Key factors include increasing drug prices and federal regulations that require insurers to shoulder more costs, said Juliette Cubanski, director of KFF’s Medicare policy program.
Rosaria Fairbanks, 99, of Melville, said she was upset when she received a letter from HealthSpring that her plan was being canceled. She takes the expensive blood thinner Eliquis, and when she looked for a new insurer, she discovered "a lot of companies don’t want to take me on because of Eliquis." She enrolled in one that does.
Fairbanks has no interest in Advantage because of the limited number of doctors.
"I’m very independent and want to go where I want to go," Fairbanks said.
Growing costs
Many people whose Advantage plans are continuing next year will face increased costs and shrinking coverage levels, especially for supplemental services like dental or vision, said Julie Carter, counsel for federal policy for the Manhattan-based Medicare Rights Center, a policy, education and advocacy group.
"To get the same care in 2027 will likely cost people more than it did in 2026," she said.
Increasing healthcare costs are a key reason why insurers are discontinuing Advantage plans or reducing coverage, she said.
In addition, the federal government, first under the Biden administration for 2025 plans and now under the Trump administration, has lowered the year-to-year increases in payments to Advantage insurers, said Jeannie Fuglesten Biniek, deputy director of KFF’s Medicare policy program.
The move means that insurers can’t afford as many perks in Advantage plans to lure Medicare recipients and that "the less efficient plans that aren't making a profit or aren't making enough of a profit have pulled out of the market," Fuglesten Biniek said.
Before 2025, "forced disenrollment" from Advantage plans was uncommon, an analysis of enrollment data found.
Insurers' challenges
Insurers said in statements to Newsday that they pulled plans out of Nassau, Suffolk or sometimes the entire state to ensure the long-term viability of all their plans. HealthSpring no longer offers its individual preferred provider organization (PPO) policies anywhere in New York. Aetna, in turn, eliminated two plans on Long Island but continues to offer several others.
Aetna still offers PPOs, but they’re the exception, and many Long Islanders are "stuck with traditional HMOs," Barrett said, referring to health maintenance organizations.
"Nobody likes HMOs," he said.
Unlike HMOs, PPOs pay for out-of-network providers, although typically at a lower rate. HMOs generally pay nothing for non-emergency out-of-network care.
The federal Centers for Medicare and Medicaid Services did not respond to Newsday’s queries, but in a Sept. 28 news release, the agency’s administrator, Dr. Mehmet Oz, touted how the government is "slashing handouts to big insurance companies."
But even with the more limited increases in year-to-year payments to insurers, the government continues to spend significantly more per Advantage patient compared with a patient on original Medicare with a similar health profile, said David Lipschutz, co-director of the Connecticut-based Center for Medicare Advocacy.
In fairness to original Medicare recipients, there should at least be parity, he said.
The changes have only been "at the margins," Lipschutz said. "Neither party, no administration, has taken meaningful steps to rein in these overpayments."
Financial watchdogs have warned that a key Medicare trust fund is headed toward insolvency, and, Lipschutz said, a key reason is that "overpayments for Medicare Advantage are putting pressure on the entire Medicare program."
Multiple independent analyses this year estimate that the federal government will spend more than a trillion dollars on Advantage "overpayments" in the next decade.
Low-cost plans
The federal payments have allowed insurers to offer plans with low or $0 premiums, which are continuing for many plans because they entice people to sign up, Lipschutz said.
"Then people sometimes get a rude awakening when they actually need to use health services" and face higher cost-sharing, prior-authorization requirements and limited provider networks, he said.
Barrett said consumers should look carefully before signing up for $0-premium plans.
"It sounds too good to be true, and it is a lot of times," he said.
David Olson covers health care. He has worked at Newsday since 2015 and previously covered immigration, multicultural issues and religion at The Press-Enterprise in Southern California.
Breast cancer does not have one face: Survivors share their stories Long Islanders breast cancer survivors talk about their mission to give back and support others.
Breast cancer does not have one face: Survivors share their stories Long Islanders breast cancer survivors talk about their mission to give back and support others.
