Elevance Health Reduces Medicare Advantage Presence and Withdraws from Standalone Prescription Drug Plans

Elevance Restructures Medicare Strategy, exits Prescription Drug Plans to Boost Profitability

Boston, MA – Elevance Health announced a critically important realignment of its Medicare business Thursday, opting to exit standalone prescription drug plans and focus resources on its Medicare Advantage (MA) and Dual Special Needs Plans (D-SNP). The move is designed to improve the company’s profitability amid growing financial pressures in the medicare market.

Strategic Shift Explained

Elevance Chief financial Officer Mark Kaye revealed the changes during the Wells Fargo Healthcare Conference, stating the decisions were carefully considered. Approximately 150,000 Elevance members currently enrolled in individual and group Medicare Advantage plans will be affected by this restructuring. The company, which serves 2.3 million MA members, aims to concentrate on plans where “long-term economics are not sustainable,” according to Kaye.

Industry-Wide challenges

The insurance industry anticipates a turbulent 2026, notably within federal healthcare programs. Payers are grappling with escalating costs associated with Medicare Advantage members, coupled with evolving federal policies that are reducing reimbursement rates.Rising healthcare costs across the board, coupled with policy shifts, have squeezed insurer margins.

Did You Know? The Centers for Medicare & Medicaid Services (CMS) projects that nearly 58.5 million people will be enrolled in Medicare Advantage plans in 2024, representing over 45% of all Medicare beneficiaries. CMS Fact Sheet

Following Industry Trends

Elevance is not alone in adjusting its Medicare strategies. Other major insurers,like UnitedHealthcare,are also scaling back their offerings,with UnitedHealthcare planning to exit plans impacting over 600,000 members. Insurers are increasingly prioritizing plans that offer greater cost control, such as Health Maintenance Organizations (HMOs) with narrower provider networks.

Focus on Dual-eligible Plans

Elevance’s decision to prioritize D-SNP – plans designed for individuals eligible for both Medicare and Medicaid – reflects a strategic bet on a growing and potentially lucrative market segment. A recent CMS rule change facilitates the consolidation of dual-eligible members under a single payer,creating opportunities for insurers with significant Medicaid footprints,like Elevance.

Star Ratings Setback

adding to the challenges, Elevance recently lost a legal challenge to improve its 2025 Medicare star ratings. These ratings are crucial, as they directly influence revenue within the privatized Medicare program, and the loss is projected to cost the insurer $375 million next year.

financial Outlook

Despite these headwinds, Elevance reaffirmed its 2025 guidance. However, the company cautioned that it doesn’t anticipate improvements in Medicaid margins in the latter half of the year, a reversal from previous expectations. Following the announcement, Elevance’s stock experienced a 4% decline.

Pro Tip: For seniors navigating Medicare options, carefully compare plans annually, considering factors like premiums, deductibles, provider networks, and drug coverage.

Key Facts: Elevance Medicare Adjustments

Area of Change	Details
Medicare Advantage (MA)	Exiting plans affecting ~150,000 members due to economic unsustainability.
Medicare Part D	Full exit from standalone Part D plans.
Dual Special needs Plans (D-SNP)	Increased focus and investment due to favorable CMS rule changes.
2025 Star Ratings Impact	Loss of legal bid to improve ratings, costing ~$375 million.

Understanding Medicare Advantage & Part D

Medicare Advantage (MA) plans, offered by private companies approved by Medicare, provide an choice to Original Medicare. They often include additional benefits like vision, dental, and hearing coverage. Medicare.gov offers detailed comparisons.

Medicare Part D provides prescription drug coverage, and is also administered by private insurers. Enrollees in Original Medicare can add Part D coverage to help pay for medications. learn more about Part D.

Frequently Asked Questions about Medicare and Elevance’s changes

What are your thoughts on the changes happening within the Medicare Advantage landscape? Do you think these shifts will ultimately benefit seniors? Share your comments below!

What impact will Elevance Health’s withdrawal have on beneficiaries currently enrolled in their standalone Prescription Drug Plans (PDPs)?

Strategic Shift in Medicare Coverage: What You Need to No

elevance Health, formerly Anthem, Inc., has announced a significant reduction in its Medicare Advantage footprint and a complete withdrawal from offering standalone Prescription Drug plans (PDPs) beginning in 2026. This decision impacts beneficiaries across multiple states and signals a broader trend of reassessment within the Medicare Advantage market. This article breaks down the details of this strategic shift, its potential implications for seniors, and what options are available. We’ll cover key aspects like Medicare Advantage plans, Part D coverage, and Elevance Health’s reasoning.

Scope of the Reduction: States Affected & Plan Types

Elevance Health’s pullback isn’t a complete exit from the Medicare market,but a focused recalibration. The company will no longer offer standalone PDPs nationwide, effectively ending its direct competition in that segment.

Here’s a breakdown of the changes:

Standalone Prescription Drug Plans (PDPs): Elevance Health will discontinue all standalone PDPs effective January 1, 2026. This means current PDP members will need to find choice coverage during the annual Medicare Open Enrollment period.

Medicare Advantage Plans (MA): The company is reducing its presence in several states, exiting certain counties and streamlining its MA offerings. Specific states impacted include:

Indiana

Kentucky

Missouri

Ohio

Virginia

Wisconsin

Focus on Integrated Care: Elevance Health intends to concentrate on markets where it can offer a fully integrated healthcare experiance, combining medical and pharmacy benefits within its Medicare Advantage plans. This aligns with a growing industry trend towards value-based care and coordinated care models.

why is Elevance Health making This Change?

Several factors contributed to this decision. Industry analysts point to consistent losses in the PDP market, driven by increased competition and unfavorable government reimbursement rates.

Key reasons include:

Profitability Concerns: Standalone PDPs have become increasingly difficult to profit from due to complex regulations and competitive pricing pressures. The CMS (Centers for Medicare & Medicaid Services) has been adjusting reimbursement rates, impacting plan profitability.

Shifting Market Dynamics: The Medicare Advantage market is evolving,with a growing emphasis on integrated care models. Elevance Health believes it can achieve greater success by focusing on MA plans that offer a more thorough suite of benefits.

Strategic Repositioning: This move allows Elevance Health to allocate resources to areas where it sees greater growth potential and can deliver more value to its members. This includes investing in Medicare advantage HMO and PPO plans.

Rising Drug Costs: The escalating cost of prescription drugs continues to be a major challenge for all Medicare plans,impacting both PDPs and MA plans with drug coverage.

Impact on Medicare Beneficiaries

The withdrawal of Elevance Health from the PDP market and the reduction in MA offerings will require beneficiaries to actively review their coverage options.

PDP Members: Those currently enrolled in an Elevance Health PDP will receive notice and will need to enroll in a new plan during the Medicare Annual Enrollment Period (October 15 – December 7).Resources like the Medicare Plan Finder (medicare.gov) can definitely help compare plans.

MA Members: Beneficiaries in affected counties may receive a notice that their current plan is no longer available. They will need to choose a new MA plan or return to Original Medicare.

Potential for Premium Increases: Reduced competition in some areas could lead to higher premiums for remaining plans. Careful comparison shopping is crucial.

importance of Special Enrollment Periods: Beneficiaries who experience qualifying life events (e.g., moving, losing other coverage) may be eligible for a Special Enrollment Period to change their Medicare coverage outside of the annual enrollment period.

Navigating the Changes: Resources and Tips

Beneficiaries facing thes changes have several resources available to help them navigate the transition.

Medicare.gov: the official Medicare website provides comprehensive information about Medicare plans, eligibility, and enrollment.

State Health Insurance Assistance Programs (SHIPs): SHIPs offer free, unbiased counseling to Medicare beneficiaries. They can help compare plans and understand your coverage options. Find your local SHIP at shiptacenter.org.

Medicare Plan Finder: This online tool allows you to enter your zip code and prescription drug information to compare plans available in your area.

Insurance Brokers: Licensed insurance brokers can provide personalized guidance and help you find a plan that meets your needs.

CMS Call Center: 1-800-MEDICARE (1-800-633-4227) provides assistance with Medicare questions.

The Future of Medicare Advantage

Elevance Health’s decision reflects a broader trend of consolidation and reassessment within the Medicare Advantage market. Other insurers are also evaluating their strategies and making adjustments to their plan offerings.

Key trends to watch include:

*Increased Sc