Many seniors choose Medicare Advantage plans over traditional Medicare because the plans can provide more comprehensive coverage and pay for things that standard Medicare simply won't cover. This can be especially important for chronically ill patients who often have high medical needs.
Unfortunately, a new rule in 2026 is imposing some strict new limits on Advantage Plans, including making it impossible for these plans to pay for some of the things that seniors -- especially those with chronic illnesses -- may really benefit from.
Here are three of those services that are now restricted.
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Medicare cannot cover these vital services
In recognition of the needs of the chronically ill, the Bipartisan Budget Act of 2018 allowed Advantage plans to cover treatments not directly related to health that would improve function or quality of life among chronic illness sufferers.
However, in 2026, the services that plans can cover are being strictly limited by a new policy change put in place by the Centers for Medicare and Medicaid Services. In fact, the 2026 contract year policy changes now explicitly prohibit coverage of these three services:
- Life insurance.
- Funeral services and funeral pre-planning.
- Hospital indemnity services.
The chronically ill may need these services
The prohibition on coverage of these services may be a major disappointment to those suffering from chronic illnesses who want to make sure their family is provided for and that plans are in place in case of a serious illness or death.
Unfortunately, Medicare Advantage plans must comply with the new CMS restrictions. Those seniors who want these services will need to pay for them out of their own retirement plans and should budget accordingly.
