Hospitals and medical centers across the United States are increasingly opting out of Medicare Advantage (MA), a popular program that provides coverage to millions of older Americans.
Providers are exiting MA so fast that Becker’s Hospital Review now continuously updates its growing list of cancellations.
In 2025, Dallas-based Baylor Scott & White severed ties with Humana Medicare Advantage; Raleigh, N.C.-based WakeMed left the network of Cigna Medicare Advantage; Nashville-based Vanderbilt Health left BCBS Tennessee; and Sioux Falls, S.D.-based Sanford Health dropped Humana Medicare Advantage, among more than 40 cancellations in all.
Hospitals cite rising administrative burdens, delayed reimbursements, and frequent denial of insurance claims.
Millions Stranded
Nearly 33 million Americans are enrolled in MA plans, accounting for 54 percent of those eligible for Medicare coverage, reports KFF. MA enrollment has doubled over the past 10 years. With more hospitals and medical centers exiting MA plans, more MA enrollees are left with fewer providers.
In explaining why Memorial Hermann Health System terminated its agreement with Humana’s MA plan last year, Michelle Lindsley, the organization’s vice president of managed care, said agreements with insurers require “mutual trust, transparency, and respect,” the Dallas Morning News reported.
“In absence of this necessary foundation, we must make decisions we feel are best for our patients, our workforce, and ultimately the viability of our organization so we might continue serving the Greater Houston community for many years to come,” Lindsley said.
Trump to the Rescue?
The Trump administration increased support for MA during Trump’s first term. The new administration has increased payments, but has not expanded the program.
In early April, the Centers for Medicare and Medicaid Services (CMS) announced payments to MA and Part D Prescription Drug Plans would rise by 5.06 percent in 2026, more than double the Biden administration’s proposed 2.23 percent increase. The higher rates may reflect the Trump administration’s use of updated data, says Jeffrey Davis, director at McDermott Plus.
“It’s not a change in policy, but [in] how they calculate things,” Davis told Managed Healthcare Executive.
MA proponents, led by the Better Medicare Alliance, are urging the administration to promote Medicare Advantage.
“Fully 95% of Medicare Advantage beneficiaries are satisfied with the quality of health care they receive,” stated a February 20 letter to then-acting CMS administrator and chief of staff Stephanie Carlton.
The average MA beneficiary spends $200 less per month than they would in fee-for-service Medicaid, the letter stated.
Hospitals Dislike Monitoring
MA plans monitor extra charges by hospitals, known as upcoding, more closely than traditional Medicare does, says John Goodman, Ph.D., president of the Goodman Institute for Public Policy Research and co-publisher of Health Care News.
“MA plans have a financial incentive to scrupulously monitor emergency-room decisions and challenge them if they appear unjustified,” said Goodman. “No wonder hospitals like traditional Medicare as a payer rather than Medicare Advantage. But remember, when MA plans eliminate unnecessary spending, they are ultimately saving taxpayers money.”
Hospitals just want more money from MA, says Goodman.
“Under current law, MA plans are entitled to pay Medicare rates,” said Goodman. “They can pay more than that, and they sometimes do. For example, if there is a shortage of a certain type of specialist in an area, an MA plan might offer to pay more than Medicare’s fee schedule in order to meet its patients’ needs. It’s a good guess that this what the hospitals have in mind.”
The hospitals may be engaging in a power play, says Goodman.
“Sit on the sidelines until the MA plans offer to pay more to draw them back into the market,” said Goodman.
Calls for Elimination
Medicare is a failed system, says Twila Brase, R.N, PHN., president of the Citizens’ Council for Health Freedom.
“Medicare Advantage is a lucrative scam,” said Brase. “Medicare Advantage is all about limits: limited care, limited networks, limited doctors. For the sake of patients and fiscal sanity, Congress should repeal Medicare Advantage, restore access to affordable, real medical-indemnity insurance for all Americans, and allow seniors to voluntarily opt out of Medicare.”
Bonner Russell Cohen, Ph.D., ([email protected]) is a senior fellow at the National Center for Public Policy Research.
Bonner R. Cohen is a senior fellow with the National Center for Public Policy Research, a position he has held since 2002.
