The Medicare insurance market officially entered a hard market in 2024 after a few years of flirting with entrance. As a result, many seniors across the United States saw their benefits drop, premiums go up, and doctor networks shrink.
So, what is a “Hard Insurance Market”?
A hard insurance market is a time in the insurance industry where premiums increase, and coverage begins to get restricted. Insurance companies want to take on less risk and therefore are more selective with the policy’s they issue during this time.
In a nutshell, there is more demand for insurance dollars than there are insurance dollars available to insure with – More demand, than there is supply.
The next natural question is, “What causes a hard market?”
The cause of the hard market can vary widely, but can often be due to excessive government regulation, like we are currently experiencing with the Medicare insurance market. Or excessive lawsuits like what is being experienced in the homeowner insurance market. Or even simply poor investment returns.
However, the cause of this hard market is due to excessive government regulation. The Inflation Reduction Act of 2022 forced insurance companies to offer far more coverage of prescription drugs and at the same time cut funding to Medicare plans. This created the perfect storm that we currently are in, and the reason many seniors are frustrated with their coverage in 2025.
As a result, we are seeing premiums increase, copays go up, more prior authorizations before procedures, underwriting is denying more coverage, and medical groups being forced to renegotiate contracts with insurance carriers.
Unfortunately, hard markets can last for years at a time and can be a frustrating experience for both the customer and the insurance broker.
Insurance brokers should focus on the core benefits of the plans and the customer’s doctors going forward. Brokers should reinforce the core needs of the customer and emphasize how the insurance meets these needs.
It can be tough for a customer to handle the loss of benefits. Insurance brokers need to have patience and compassion with customers when having these conversations. Florida Medicare Broker likens himself to a “therapist” during these meetings. He says “It is important to allow the customer to be heard and vent their frustrations to you. They understand that it is not your fault benefits are being cut, and that you are doing the best that you can, but they need to know that they are being heard.”
As an entrepreneur, your business depends on you. Be sure to take the time to plan your next move and take advantage of the opportunities that arise from chaos in the marketplace. A cut in benefits could bring the opportunity to introduce a new product line such as Dental, Vision, or Hospital Indemnity products.
But hard markets can also be stressful, and demand more of your time. Don’t forget to also pencil in some rest and relaxation into your weekly schedule. After all, a stressed out and tired entrepreneur is not only not fun to be around but is also not productive.
As a result, we are seeing premiums increase, copays go up, more prior authorizations before procedures, underwriting is denying more coverage, and medical groups being forced to renegotiate contracts with insurance carriers.
