Big changes are coming to the Medicare Advantage marketplace, and if you’re over 65, it’s worth paying attention to the notices you may be receiving in the mail. The last thing anyone wants is a surprise coverage gap.
Let’s start with the basics. Medicare covers people 65 and older. Part A handles hospital stays and some nursing care. Part B covers doctor visits and outpatient care. Part C, or Medicare Advantage, bundles A and B together, often with drug coverage and extras like dental or vision. Part D is prescription coverage you can add if you’re on regular Medicare.
Now here’s the problem: Medicare Advantage. Lower government reimbursement rates and rising medical costs are causing the private insurers who sell these plans to cut their offerings. The reductions are hitting less populated and rural areas particularly hard especially in states with more Medicare enrollees. Consider the case of Vermont. The state has around 170,000 people on Medicare with a third on Advantage plans. These plans were convenient and more affordable than the supplemental Medigap coverage. In 2025, for example, the average monthly premium for an Advantage plan in the state was about $31 versus $165 per month for Medigap. One downside to the plans, however, was that they required you to stay “in-network” when seeking care. This could become an issue for patients seeking specialized care or wanting to see a specific out-of-network provider.
That’s changing fast. Many insurers are shrinking their service areas. Vermont Blue Advantage, for instance, won’t have any plans after 2025. Some counties might not have any Advantage options at all.
Why? Costs are rising with older populations and the increased paperwork and rules, pressuring profits. The insurers are making business decisions, but for the rest of us, it’s a headache.
Why did people like these plans? Convenience. Everything together, one company, one bill. Now, many Vermonters will have to piece coverage back together. That means going back to Original Medicare — Part A (usually free) and Part B (about $206.50 a month in 2026) — and then adding Medigap to cover out-of-pocket costs. Medigap can cost $150 to $250 a month, depending on your health and the plan you pick. Then there’s a separate Part D drug plan, which can be anywhere from $8 to $100 a month.
It adds up fast, and it’s confusing. What used to be one bundled plan becomes a mix of different companies, bills, and deadlines. Most people will see premium costs go up; others might see a reduction in benefits, which could risk unforeseen gaps in coverage.
So, what should Medicare Advantage policyholders facing these changes do? First, don’t panic. But don’t wait either. Find someone who can talk clearly through your options. That might be an insurance broker, but make sure you trust them — they’re usually paid for the plans they sell, so double-check the info. Ask questions, compare options, and don’t rush.
The timing is important. The regular Medicare open enrollment period is October 15 to December 7. But because of these plan cancellations, anyone who loses an Advantage plan has a special window to sign up for a Medigap policy without being denied for health reasons. That window runs until March 6, 2026. After that, insurers can resume reviewing health history. So, don’t wait; get your coverage lined up sooner rather than later.
There are resources to help. Many affected states are ramping up resources. Here in Vermont, for example, the State Health Insurance Assistance Program (SHIP) offers free guidance at 1-800-642-5119. The Vermont Department of Financial Regulation can also help, or you can call 1-800-MEDICARE or visit Medicare.gov for federal info.
Many insurance companies are finding it hard to make money in smaller, rural communities with aging populations. The result means fewer choices and higher costs for most insurance offerings. It’s frustrating and not how it should be, but that’s the reality. The best thing you can do is pay attention, ask questions, and get your coverage sorted before any gaps happen.
