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“Medicare Advantage” plan participants experiencing disruption - Morningstar

“Medicare Advantage” plans are offered by private insurers and provide healthcare insurance coverage in lieu of traditional government-run Medicare plans (Medicare Part A, Part B, and Part D). Long touted as somewhat of a healthcare panacea, Medicare Advantage plans have experienced rapid growth over the years in the healthcare insurance marketplace. These plans typically offer similar healthcare coverage to traditional Medicare as well as additional benefits at little or no additional cost. In other words, they are very popular plans.

But all is not well in the Medicare Advantage (MA) marketplace. Private insurers are, after all, driven by profit, which means that they frequently take measures to contain expenses. In recent years, many MA providers have dropped certain plans in favor of offering other more-profitable options, causing a disruption in the MA marketplace. In fact, as measured by “forced disenrollment” (that is, when a subscriber is forced to leave an MA plan because it has been discontinued), the occurrence rate has increased in the past decade from about 1% to over 10% today. This essentially means increasingly fewer coverage choices for MA plan holders, thus the disruption as explained by Jessica Hall in this Morningstar article.

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