Analysis of the 2025 Medicare Advantage Plan Landscape

The cumulative impact of recent legislative and regulatory changes to the Medicare Advantage program is resulting in beneficiary disruptions for 2025, including fewer Medicare Advantage plan and benefit choices and higher out-of-pocket costs. In 2025, the number of Medicare Advantage plans nationally will decrease by 2.8%, including a 6.5% decrease in individual Medicare Advantage plans and an 8.5% increase in Special Needs Plans (SNPs). The change in plan offerings will impact 1.98 million current beneficiaries who will have to choose a new plan in 2025. As the number of plan offerings decrease, the average Medicare Advantage plan premium will remain consistent as compared to 2024. Meanwhile, the median maximum out-of-pocket (MOOP) limit for beneficiaries will increase from $5,000 to $5,400.

Although most plans will continue to offer dental, vision, and hearing benefits, many individual plans are reducing the level of other supplemental benefits that help address clinical and social risk factors, such as transportation and nutrition assistance. Some supplemental benefit offerings will increase. For example, more plans will offer telehealth services as a supplemental benefit. There is also significant variation across states in how plans are reacting to the current situation. However, the national trend indicates a clear retrenchment among plans and benefits in response to the challenging environment with increased healthcare utilization and policy changes putting pressure on plan operations and payment. As policymakers consider policy and payment changes for 2026, stability for the Medicare Advantage program is critical to minimizing further disruption and preventing unintended consequences for beneficiaries.