Blue Cross Blue Shield NLO on Medicare Advantage's Shifting Landscape

Merrilee Logue, Executive Director of the Blue Cross Blue Shield Association National Labor Office, and Duncan Lawson, who tracks national Medicare and Medicaid market trends for the BCBSA, joined the America's Work Force Union Podcast to discuss a Medicare Advantage landscape that has become more complicated for union members and retirees to navigate.

For the second consecutive year, more than 2 million Medicare Advantage consumers had their plans terminated, and even more saw their benefits reduced. Lawson and Logue explained the financial pressures driving those reductions, which plans and regions have been most affected, why Medicare Advantage remains the most popular coverage option for retirees despite the changes and what union members approaching 65 need to know to find coverage that fits their needs and circumstances.

• For the second consecutive year, more than 2 million Medicare Advantage consumers had their plans terminated in 2026, with many more experiencing benefit reductions. The primary driver is Medicare Advantage payment rate increases that have not kept pace with rising medical costs, a trend Lawson said may continue into 2027. The reductions have been most pronounced among PPO plans, plans offered by smaller carriers and plans in less populated rural areas with a smaller Medicare Advantage market presence.
• Despite two years of plan reductions, Medicare Advantage remains the most widely used coverage option for retirees, with more than 35 million people currently enrolled. Logue noted that even in the current environment, there is still at least one zero-premium Medicare Advantage plan with prescription drug coverage available to virtually every Medicare beneficiary. Lawson shared that his parents recently aged into Medicare eligibility and both found plans that fit their needs well, one through a Medicare Supplement plan and one through a zero-premium Medicare Advantage HMO with supplemental benefits.
• Logue and Lawson outlined the enrollment options union members approaching 65 should be aware of. This includes checking whether their union offers Medicare coverage as a starting point, understanding the difference between Medicare Supplement plans and Medicare Advantage plans, working with a local broker to navigate the selection and taking advantage of special enrollment periods available for specific circumstances, including moving to a new county, becoming eligible for dual Medicare and Medicaid plans or enrolling in a highly rated five-star plan.

Medicare Advantage: The Basics

For listeners who are not yet in the Medicare or Medicare Advantage world, Lawson offered an overview. Medicare is the federal health insurance program for anyone 65 or older, or for those who qualify earlier due to a chronic condition. It has several parts. Part A covers hospital insurance and is free. Part B covers services from doctors and other providers and may carry a premium based on income. Part D covers prescription drugs and also may carry a premium depending on the plan selected.

Medicare Advantage bundles Parts A and B together, often includes Part D and frequently adds supplemental benefits such as vision, dental, hearing and wellness programs. It is designed to provide beneficiaries with comprehensive coverage under a single plan, which is a significant reason it has become the most popular Medicare coverage option in the country.

Two Consecutive Years of Plan Reductions

The landscape Lawson described is one that union leaders and benefits administrators are watching carefully. For the second consecutive year in 2026, more than 2 million Medicare Advantage consumers had their plans terminated. Even more consumers experienced benefit reductions, without losing their plans entirely. The root cause, Lawson said, is that Medicare Advantage payment rate increases from the federal government have not kept pace with the actual rate at which medical costs have risen. Insurance carriers absorbing that gap have responded by pulling back on plans they can no longer sustain financially.

The reductions have not been evenly distributed. PPO plans have been more affected than HMO plans. Smaller carriers have been more affected than larger ones. Rural and less populated areas, where the Medicare Advantage market has historically had a smaller presence, have seen more pronounced reductions than urban markets. Lawson said the trend may continue into 2027, making it more important than ever for union members approaching Medicare eligibility to do their research and work with knowledgeable advisors rather than assuming last year's options will be available this year.

Why Medicare Advantage Is Still the Right Choice for Many

Logue was careful to balance the picture. The reductions are real, but they have not eliminated Medicare Advantage as a strong option for most beneficiaries. More than 35 million people are enrolled in Medicare Advantage plans. Even in the current environment, at least one zero-premium Medicare Advantage plan with prescription drug coverage is available to virtually every Medicare beneficiary nationwide. The appeal of Medicare Advantage — affordable, comprehensive benefits under one straightforward-to-use plan — has not changed.

Logue also connected the Medicare Advantage conversation to the broader fight for healthcare affordability that unions have pursued for decades. Unions have negotiated the strongest health benefits available for American workers, and that legacy extends into retirement for many members. The challenge of rising costs and shrinking plan availability in Medicare Advantage is part of the same financial pressure affecting the entire healthcare system. Addressing it requires the same combination of advocacy, informed decision-making and collaboration between unions, trust funds and insurance carriers that has always characterized labor's approach to health benefits, Logue added.

A Personal Example Worth Hearing

Lawson shared an example that illustrates both the current complexity and the continued availability of good options. His parents both turned 65 recently and became eligible for Medicare around the same time. They made different enrollment decisions and are both happy with their choices.

His mother travels frequently and wants the flexibility to see any doctor she chooses, regardless of where she is. She enrolled in a Medicare Supplement plan paired with a standalone Part D drug plan. His father found a zero-premium Medicare Advantage HMO plan that included his doctor in the network, an over-the-counter card benefit and prescription drug coverage. Neither of them struggled to find a plan that fit. Both worked with a local broker, and the process went smoothly. Lawson said the takeaway for union members is that, even with fewer plans on the market than a few years ago, the selection available to most beneficiaries is still extensive if they take the time to look.

What Union Members Need to Know Before They Turn 65

Logue and Lawson closed with practical guidance for union members approaching Medicare eligibility. The first step is checking whether the union fund offers Medicare coverage for retirees, as many do. For those whose funds do not, the next step is understanding the full range of individual Medicare options available, including both Medicare Supplement plans paired with Part D and Medicare Advantage plans.

Working with a union health benefit representative or a local broker is the most reliable way to find plans that match individual circumstances. General information on Medicare Advantage is available at bcbs.com/MedicareAdvantage, and the government's medicare.gov site provides comprehensive information on all Medicare options.

Special enrollment periods are available for specific situations that include moving to a new county, becoming eligible for dual Medicare and Medicaid coverage, and enrolling in a five-star-rated plan. Windows outside the standard enrollment calendar are available for each situation. Members who experience those circumstances do not have to wait for the annual open enrollment period to make a change.

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