Life Time limits gym access for Medicare seniors, prioritizing other members

Next year, seniors using Medicare benefits seeking a pickleball game, laps in the pool or just a walk on the treadmill at Life Time will have fewer hours to do so.

Currently, seniors enrolled in Medicare health insurance plans don't face time limitations and can visit any Life Time club at any time without paying individually. But starting in January, the Chanhassen-based fitness chain will restrict Medicare members to visiting between 9:30 a.m. and 3 p.m. on weekdays and after 2 p.m. on Saturdays. There won't be restrictions on Sundays.

Gym industry experts said while it's a bit unusual, Life Time's decision reflects the growing challenge fitness centers face in trying to accommodate discount memberships while preserving their bottom line.

Life Time said the changes came after negotiations with Medicare fitness program administrators about the rate the programs will pay the company on behalf of Medicare members. The rate Medicare providers pay is significantly discounted from the standard membership, which can be as high as $299 a month.

"Ultimately, as opposed to not renewing agreements and providing no further membership options for Medicare enrollees, we aimed to create a solution that could continue to serve a large and rapidly growing Medicare population and do so with a continued, significant price advantage," a Life Time statement said.

Blue Cross and Blue Shield of Minnesota, HealthPartners, Medica and UCare said about 18,000 seniors — mostly Minnesotans — work out at Life Time as part of their Medicare coverage.

Access to fitness centers is not a standard benefit in Medicare, which provides health insurance for seniors and certain special populations. But a growing share of seniors opt to receive the coverage through Medicare Advantage plans from private insurers, which routinely include access to gyms as an extra benefit. The fitness benefit also is a part of a few Medicare supplemental policies, which private insurers sell to round-out benefits in original Medicare.

To administer fitness benefits, health insurers hire third-party companies such as SilverSneakers, Silver&Fit and Renew Active/One Pass, which is part of Minnetonka-based UnitedHealth Group.

People with Medicare memberships can purchase an upgrade for as low as $80 per month for unlimited access during all open hours, Life Time said.

For more than 30 years, Bob Margolis, 77, of Arden Hills, has been visiting the Life Time club in Fridley, formerly a Northwest Athletic Club. He stopped paying dues directly to Life Time a few years ago because he gained access through his Medicare health plan.

With the new limits next year, Margolis said he'll delay his weekday workouts until later in the morning. But he thinks the changes will inconvenience others more, because he estimates seniors account for at least half the people using the Fridley club most mornings.

"I think it's pretty clear that they're just trying to get more money from the insurance companies," Margolis said. "Or if they don't get it out of the insurance companies, they're going to try and get people to shell out $80 per month."

The change has frustrated Diane Lysen, 72, of Edina, who visits Life Time's club in Eden Prairie. Because her Saturday morning fitness class won't be open to seniors next year, Lysen already has asked whether the club could re-schedule the sessions to fit with the new limitations. She questioned why the company is making the change.

"It isn't like we're over-using the equipment," said Lysen, who works as an insurance agent.

Other kinds of fitness centers place limits on Medicare health plan members' frequency of visits or number of classes. For example, at some specialty gyms like Pure Barre, F45 Training and StretchLab, membership through partner Medicare programs includes a set number of classes or sessions a month with the option to pay for more.

But Joshua Haberman, the chief executive at Bloomington-based insurance broker Haberman & Alexander, said Life Time's decision strikes him as atypical. The health clubs YMCA of the North operates, for example, don't limit the hours for Medicare members.

"I've never heard of anybody restricting hours," he said. "You're either in or you're out."

Shawnee Christenson, an insurance agent in New Hope, said she's fielded complaints about the change, something she's heard of happening in other states but never before in Minnesota.

John Atwood — founder and managing partner of Boston area-based Atwood Consulting, which advises gyms and other athletic facilities — said many fitness centers wrestle with how to offer discounted memberships. It can be difficult for fitness facilities, including nonprofits like the YMCA, to offer subsidized memberships for Medicare fitness programs such as SilverSneakers.

"The amount of revenue that comes in from SilverSneakers is so small, it's hard to justify having the program," he said.

For a club with membership fees ranging from $9 to $30 a month, the prices could be comparable. However, that's not fitness centers like Life Time, Atwood said.

Through the past couple of years, Life Time has invested millions of dollars to open more resort-like clubs with numerous amenities such as saltwater pools, cabanas and spas. As Life Time clubs have elevated their amenities, the company has increased its membership dues, with the lowest tier at $99 a month.

Life Time CEO Bahram Akradi told analysts in July that the adjusted prices allow the company "to manage the experience."

Akradi added that dues could continue to increase.

In April, May and June of this year, Life Time turned a profit of $17 million as compared with a net loss of $2.3 million during the same time last year. That is thanks in large part to the revenue per center membership increasing about 10% and membership dues and enrollment fees going up 25% to more than $387,000.

Medicare Advantage health plans for seniors, meanwhile, have been a profitable line of business for insurers.

Life Time has acknowledged the importance of seniors at its clubs. Last year, it launched its ARORA programming for seniors. It offers memberships discounted about 10% to people 65 and older.

Atwood said the policy "might legitimately be a way that Life Time can keep this program going."