The once-stodgy, boring Medicare program experienced many changes over the last few years. More changes were announced in the last few weeks.
A major change is that beginning July 1, Medicare covers prescriptions for GLP-1 drugs for $50 per month under Part B when they are prescribed for weight loss.
Until now, Medicare was prohibited from covering the medications when prescribed solely for weight loss. The drugs have been covered under Part D when prescribed for diabetes.
The new benefit is a temporary program through December 31, 2027.
The change is likely to spur demand for the drugs. Analysts expect that many people who would benefit from the drugs and would like to use them have not been able to afford them. Analysts anticipate that the change will result in significant new demand for the medications that could result in supply shortages.
The new benefit has a prior authorization process to assess whether a patient meets the requirements for the low-cost prescriptions.
Some health professionals are concerned that patients might not receive all the counseling needed to ensure they take the drugs properly, have dosages adjusted as needed and know how to deal with the side effects.
In other Medicare news, there was a new study of prior authorizations in Medicare Advantage plans.
The three largest Advantage plans denied requests for inpatient rehabilitation facilities and long-term care hospitals at higher rates than 16 other Advantage plans, according to the Office of the Inspector General of the Department of Health and Human Services.
Using a sample of data from June 2024, the study found that the larger Advantage plans denied almost two-thirds of requests for hospital-level care and more than half of requests for admission to rehabilitation facilities. Those were higher rates than for the other Advantage plans.
Many of the decisions to deny care were reversed after they were appealed.
Yet another recent development is that many Medicare Advantage plan insurers are recovering from the financial distress of the last few years.
Over the last three years, demand for medical care exceeded the expectations of insurers.
Apparently, much medical care was neglected or deferred during the pandemic.
Medicare Advantage plan members returned to medical providers for that care, causing Advantage plan insurers to spend more than they anticipated when setting the terms for their plans.
Insurers also were hurt as the inflation that began in 2021 caused the costs of many types of care to exceed expectations.
At the same time, the government decided it was being too generous with Medicare Advantage plan insurers. It set lower reimbursement rates than insurers anticipated.
The government also instituted several policy changes that eliminated practices Advantage plans used to increase reimbursements.
The result was that profits fell sharply or turned into losses for many Advantage plan insurers.
Some insurers left the Advantage market.
Others offered fewer plans and increased premiums, deductibles and co-payments.
Some Advantage plans reduced the care that was covered, especially ancillary benefits that are not part of original Medicare.
In their latest earnings reports, most Advantage plan insurers reported that so far this year demand for medical care has not increased as much as in the last few years.
The insurers’ costs are lower than they expected.
Also, the government was more generous with its reimbursement rates in 2026 than in the past couple of years and probably will be in 2027.
The result is that stock prices and earnings reports improved over the last year.
That should mean that the Medicare Advantage market for 2027 will be more stable than it has been in the last few years. We will know for sure when open enrollment begins in October.
