New Medicare Advantage Rule Forbids Coverage of Popular Services
Key Points
Medicare Advantage Plans will cover less in 2026 than they did in 2025.
The government has put new rules in place that impose stricter coverage restrictions.
Retirees who rely on Medicare Advantage should make sure their preferred medical services aren't on the list.
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If you're 65 or over, chances are good you have your health insurance through either Medicare or a Medicare Advantage Plan. If you have Medicare Advantage, you must know about new restrictions on coverage.
In particular, there are some popular programs that Medicare Advantage won't be allowed to cover in 2026. That's thanks to a new regulation published by the Centers for Medicare and Medicaid Services that changes certain things.
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Here's what you need to know about the Medicare coverage changes.
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Medicare is forbidden from covering these programs
The Bipartisan Budget Act of 2018 authorized Medicare Advantage to provide coverage for Supplemental Special Benefits for the Chronically Ill. This authorization means that Medicare could pay for things that weren't directly related to health or medical conditions but allowed chronically ill people to improve or maintain their health function.
CMS is now taking aim at some of the things Medicare Advantage plans tried to cover under that program. The new CMS rules now make it clear that Advantage Plans can't cover:
- Alcohol
- Cannabis
- Cosmetic surgeries
- Food that is unhealthy
- Funeral expenses
- Hospital indemnity insurance or life insurance
- Tobacco products
The goal of imposing these new limits is to ensure that Advantage plans offering alternatives to traditional Medicare coverage are using their funds wisely.
"We believe that codifying a non-exhaustive list of examples of items or services that do not meet these standards will provide transparency and greater certainty for MA organizations and enrollees about the rules that govern these benefits," CMS stated.
Medicare Advantage Plan members should be aware of new restrictions
Retirees on Medicare Advantage Plans should be aware that the government is cracking down on the kinds of supplemental benefits that their insurance will pay for.
Anyone who was receiving coverage for these services through their plan will now need to make alternative arrangements for paying the costs, including potentially paying for any expenses out of their retirement plans.
The change demonstrates a broader truth about Medicare Advantage (and Medicare coverage in general). The government can and does change the rules periodically, and when that happens, retirees will need to adjust to shifts in the care they can access.
Those who are signing up for plans each year during open enrollment will need to review coverage options carefully, understand what is excluded and included, and make informed choices about which plans best suit their needs.
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