During a recent government meeting, Tom DeLesi, principal consultant from Workplace Benefit Solutions, presented a comprehensive overview of the upcoming renewal for the Medicare Advantage plan, highlighting significant changes in the healthcare landscape over the past two years.

DeLesi explained that the school district sponsors the Medicare Advantage program for post-65 retirees, although it does not directly pay for it. He noted that the current economic climate, particularly inflation, has dramatically affected medical costs, leading to an unprecedented increase in premiums for the upcoming year. The monthly premium is set to rise by approximately $130 to $120, bringing it to around $430—marking a return to rates seen in 2020.

The presentation emphasized the shift in Medicare reimbursement structures due to the Inflation Reduction Act, which has resulted in a decrease in federal support for Medicare Advantage plans. Historically, these plans received about a 4% annual increase in reimbursement; however, this year, they are facing an 8% decrease. This change is expected to directly impact retirees, as the costs will be shifted from Medicare to the individual plans.

DeLesi also outlined changes to Medicare Part D, which will further affect costs for retirees. Starting in 2025, Medicare's contribution to catastrophic drug coverage will drop from 60% to 20%, with the remaining costs being absorbed by the plans and ultimately passed on to members.

The meeting underscored the challenges facing Medicare Advantage plans amid rising healthcare costs and evolving federal policies, prompting the need for careful consideration by the board as they navigate these changes. DeLesi confirmed that the only competitive quote received for the plan renewal was from United American, which was $90 higher than the Anthem renewal, indicating limited options in the current market.