Retirees enrolled in a specific Excellus Medicare Advantage plan are facing a significant premium increase of 70% set to take effect in 2026. The change, which one policyholder initially mistook for a typographical error, will add a notable new expense for seniors on fixed incomes.
Henry Rogala, a 76-year-old retiree, received a notification booklet from the insurer detailing the upcoming rate adjustment. His monthly premium is scheduled to rise by $21.80, a substantial percentage increase that highlights the volatility some seniors can face in the private insurance market for Medicare.
Key Takeaways
- An Excellus Medicare Advantage plan is set to increase its premium by 70% in 2026.
- The rate hike amounts to an additional $21.80 per month for affected members like 76-year-old Henry Rogala.
- Such increases are often driven by rising healthcare costs, changes in government funding, and higher service utilization.
- Retirees are advised to review their plan options annually during the Open Enrollment period to manage costs.
Details of the Premium Increase
The notice sent to policyholders outlines a clear and substantial change in monthly costs. For Mr. Rogala, the 70% jump translates to an extra $261.60 per year for his health coverage. This type of sudden increase can be a shock for individuals who rely on a predictable budget during their retirement years.
The initial reaction of disbelief from customers like Rogala underscores the challenge many seniors face when navigating their healthcare finances. A stable, low premium can be a primary reason for choosing a particular Medicare Advantage plan, and a drastic change can force a reevaluation of their coverage choices.
What is Medicare Advantage?
Medicare Advantage, also known as Medicare Part C, are health plans offered by private insurance companies approved by Medicare. These plans bundle Part A (Hospital Insurance), Part B (Medical Insurance), and often Part D (prescription drugs) into a single policy. While they often feature low or zero-dollar premiums, costs can change annually.
Factors Driving Medicare Advantage Rate Hikes
While Excellus has not detailed the specific reasons for this particular plan's increase, several industry-wide factors typically contribute to rising premiums for Medicare Advantage plans. Understanding these drivers provides important context for the cost pressures affecting millions of American seniors.
Rising Medical Costs
The primary driver of any insurance premium is the underlying cost of healthcare. Inflation in the medical sector, which includes everything from hospital services and physician salaries to prescription drugs and advanced medical technology, directly impacts what insurers must charge to cover their members' claims.
Changes in Government Payments
The federal government, through the Centers for Medicare & Medicaid Services (CMS), pays private insurers a fixed amount per enrollee to provide Medicare Advantage benefits. In recent years, changes to the risk adjustment model and payment benchmarks have altered the funding insurers receive. A reduction or slower growth in these payments often leads insurers to increase premiums or reduce benefits to maintain profitability.
Enrollment Statistics
According to KFF, more than 33 million people, or 52% of the eligible Medicare population, were enrolled in a Medicare Advantage plan as of early 2024. This highlights the large number of Americans potentially affected by annual premium adjustments.
Increased Healthcare Utilization
Following the pandemic, many healthcare providers have reported an increase in patients seeking care they may have previously delayed. This includes more elective surgeries and regular check-ups. Higher utilization of medical services means insurers are paying out more in claims, which in turn puts upward pressure on the premiums they need to collect from members.
The Impact on Seniors and Fixed Incomes
For retirees, a sudden 70% increase in a recurring expense is more than an inconvenience; it can disrupt a carefully planned budget. Most seniors rely on a combination of Social Security benefits, pensions, and personal savings, none of which typically increase at such a rapid pace.
"When you're living on a fixed income, every dollar counts. An unexpected increase of over $20 a month means making difficult choices elsewhere, whether it's groceries, utilities, or other essential expenses."
This financial pressure forces many to become more proactive in managing their healthcare costs. The annual nature of Medicare Advantage plan contracts means that benefits, provider networks, and costs can change every year, requiring seniors to pay close attention to the notices they receive from their insurers.
What Options Do Consumers Have?
Fortunately, beneficiaries are not locked into a plan that has become unaffordable. The structure of Medicare provides specific times when individuals can review and change their coverage to better suit their financial and medical needs.
The most important window is the Medicare Annual Open Enrollment Period, which runs from October 15 to December 7 each year. During this time, beneficiaries can:
- Switch from one Medicare Advantage plan to another.
- Switch from a Medicare Advantage plan back to Original Medicare (Part A and Part B).
- Join, drop, or switch a Medicare Part D prescription drug plan.
It is crucial for individuals like Mr. Rogala to use this period to compare the new costs and benefits of their current plan against other available options in their area. Tools like the official Medicare Plan Finder website can help compare premiums, deductibles, and co-pays across multiple insurance companies.
Additionally, the Medicare Advantage Open Enrollment Period from January 1 to March 31 allows individuals already in an Advantage plan to make a one-time switch to a different Advantage plan or return to Original Medicare. This provides another opportunity to make adjustments after the primary enrollment window has closed.
Consulting with State Health Insurance Assistance Programs (SHIPs) can also provide free, unbiased counseling to help beneficiaries understand their choices and select the most suitable and cost-effective plan for the upcoming year.
