2025 Medicare Market Updates: UnitedHealthcare Market Exits, Drug Costs, and Rural Hospital Legislation

UnitedHealthcare is exiting certain Medicare Advantage markets due to underperformance and is planning price increases in Medicare supplement plans, affecting approximately 600,000 beneficiaries. This reduction in plan availability and the rising cost pressure mark significant market shifts ahead of the Medicare open enrollment season.

Additionally, regulatory and trade developments are expected to elevate Medicare Part D prescription drug premiums. A new 15% tariff on European drug imports, including medications like Keytruda and Ozempic, will add to manufacturer costs that could be passed to consumers. Though the Medicare Part D subsidy program will continue, a phased reduction through 2026 may raise premiums and out-of-pocket costs for many seniors. Legislative efforts targeting rural healthcare also take center stage, as Senator Josh Hawley has introduced the Protect Medicaid and Rural Hospitals Act. This bill proposes increased federal funding for rural hospitals and Medicaid adjustments to address potential closures, aiming to sustain healthcare access for rural beneficiaries despite potential legislative obstacles.

Furthermore, recent federal regulatory changes are imposing additional administrative requirements on the Medicare Savings Programs, which assist low-income Medicare beneficiaries with healthcare expenses. These new rules may restrict program accessibility, increasing risks for vulnerable populations facing higher out-of-pocket costs. Collectively, these developments signal a period of market and policy challenges impacting Medicare coverage, affordability, and rural hospital sustainability in 2025 and beyond.