While more than half of people with Medicare are enrolled in Medicare Advantage, hospital systems increasingly finding that they can’t make it as in-network Medicare Advantage providers. Ninety health systems have pulled out of Medicare Advantage in three years. What happens if even more follow?
Hospitals are finding that they fare a lot better serving people in traditional Medicare than they do providing care to Medicare Advantage enrollees. Already, this year, 15 health systems have parted ways with at least one Medicare Advantage plans. Insurers offering these plans pay less and impose far larger administrative burden than traditional Medicare.
A new study in JAMA projects that, in 2026, nearly three million Medicare Advantage enrollees were forced to switch to new coverage because of Medicare Advantage insurers leaving the market. In Idaho, Maryland, New Hampshire, North Dakota, South Dakota, Vermont and Wyoming, more than four in ten Medicare Advantage enrollees had to find new coverage. In Vermont, more than nine in ten needed to find new coverage, reports Amina Niasse for Reuters.
Alan Condon at Becker’s interviewed executives at several hospital systems to understand their thinking around Medicare Advantage. Scripps President and CEO Chris Van Gorder explained why Scripps pulled out of Medicare Advantage: “[W]e were losing about $75 million a year on those contracts, and the payers weren’t willing to negotiate the changes we needed — not just higher reimbursement, but addressing prior authorization issues and paying us what they were contractually obligated to pay.”
Providence CEO Erik Wexler explained: “If we are not seeing fair performance in how we are paid for the care we provide — and if denials and delays are not within a reasonable sphere of performance — then we are not going to continue working with that commercial payer.” In January, Providence Clinical Network, including 15 California hospitals, ended its Medicare Advantage contract with UnitedHealthcare.
Wexler also said that Medicare Advantage insurers are 70 percent more likely to deny payment based on incomplete medical records and twice as likely to deny care based on medical necessity as traditional Medicare.
Mayo Clinic’s CFO, Dennis Dahlen, explained that Mayo is not willing to contract with certain Medicare Advantage plans, including most offered by Humana and United Healthcare.
According to Eduardo Conrado, president and CEO of Ascension: “Congress created Medicare Advantage to deliver better benefits, broader coverage and lower costs for seniors. Too often, that is not what patients experience.” Ascension is also seeing payments denied 70 percent more often than traditional Medicare and coverage denied twice as often as traditional Medicare.
While older adults and people with disabilities tend to want and need a broad choice of doctors and hospitals, insurers are looking to offer more restricted provider networks as a way to maximize profits. And, as of now, it’s the insurers who are running the show.
The message for people with Medicare is clear: If you think you might get sick and need coverage for your care, stay clear of Medicare Advantage. It’s a gamble whether you will get the care you need. And, if you want to switch to traditional Medicare, odds are that you won’t be able to buy a Medigap policy. Only four states–Massachusetts, Maine, New York and Connecticut–require insurers to sell people Medigap policies after their initial enrollment in Medicare.
Here’s more from Just Care:
- John Oliver explains Medicare and the dangers of Medicare Advantage
- Medicare Advantage endangers rural hospitals
- 24 health systems drop their Medicare Advantage contracts
- More hospitals are dropping Medicare Advantage
- Hospitals increasingly opt out of Medicare Advantage networks
