Undertow
As an early teen, I lived in Norfolk Virginia. My dad was in the Navy, so we lived on or near base all my young life. As a kid in Norfolk, I spent a lot of time on one of the beaches of Chesapeake Bay. On a rare and special occasion, I would get to go to the beach on the Marine base where I could swim in the ocean. The waves there were much bigger and much more fun. We didn’t have the money to buy fancy beach toys, so I would belly surf.
Although it was fun, I quickly learned the dangers of the undertow. If you are not familiar with this, it is when after those big waves hit the shore, they rush back down and under the new waves coming in, causing a strong undercurrent back out to sea, i.e.: undertow. You don’t see this undertow, but it is not uncommon for someone to be dragged out into deep water. I have experienced the undertows of the Atlantic Ocean, and they can be dangerous.
Making Waves
In 2024, HHS (Health and Human Services) and CMS (The Center for Medicare and Medicaid Services) are making some changes that will affect us like the undertow. You won’t see them directly, but they will likely change some things for Medicare beneficiaries that receive coverage with a Medicare Advantage Plan. Let me explain.
The primary change that is most likely to affect Medicare Advantage beneficiaries is the Star Rating methodology. I won’t dive too deep into this, but let me just say, the government is looking for ways to pay the insurance companies less money. To me, this is like playing cards with my nine-year-old grandson. If he doesn’t like the results, he changes the rules.
Star Ratings
Let’s ride this wave for a moment. The insurance companies get paid by the government to help manage our health care. The better job they do, the more they get paid. And all these companies and all these plans, work their tails off to meet the standards set by the government. The plans are rated on a star rating scale from one to five, the higher the star rating, the more they get paid and in turn, the more benefits they can offer us. A five-star rating is the platinum standard and there are very few plans that achieve this standard. For plans that have a star rating of less than three, they likely won’t survive financially beyond another year or two. Today, we see a lot of plans that are 3.5 to 4.5 star rated.
Over the past ten to fifteen years, I’ve watched these companies work hard to achieve a star rating over four stars and the average plan’s star rating in 2023 was about 4.2. Moving forward into 2025, with the new rating methodology, those same plans will have an average of about 3.9 stars. It doesn’t sound like much, but it would reduce the amount of money the insurance companies get each month by about $1.5 Billion.
Can you see where this is going? If they are making less money, the insurance companies will have to suck it up and adjust somewhere. See what I just did there? Clever analogy don’t you think?
Now, not to worry. The insurance companies and their actuaries are very good at shaving pennies in such a way that you won’t see any big changes, but there will be changes. For example, a dental plan with a $1200 a year benefit might have to change to $1000 benefit. Or a $35 visit to a specialist might become $40. These are simply speculations, and we won’t know the full impact for a year or two. But the undertow is coming.
Help is Here
So, what do you do? Get help to figure out the best plan for you. Adams Insurance LLC is here to help you navigate any significant changes. Call us, we’ll be sure to help you get safely back to shore.