Medicare Advantage Under Fire: Profits Prioritized Over Patient Care
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The open enrollment period for Medicare ends December 7, but a growing crisis in the privatized Medicare Advantage (MA) market is leaving millions of seniors confused and potentially uninsured for 2026.
For years, health insurance companies offering MA plans have aggressively recruited members with the promise of low or even $0 premiums, alongside supplemental benefits – such as dental, vision, and hearing care – not traditionally covered by standard Medicare. However, these enticing offers often obscure significant drawbacks, including stringent preauthorization requirements for procedures and medications, and limited networks of healthcare professionals. These disadvantages are rarely disclosed by brokers incentivized to enroll as many members as possible. As of 2025, more than half – 54 percent, or 34.1 million – of Medicare beneficiaries are enrolled in MA plans, with UnitedHealthcare holding the largest share at 9.9 million members.
The COVID-19 pandemic initially led seniors to postpone medical care due to health concerns, allowing MA plan sponsors – including UnitedHealthcare, Humana, Elevance, Centene, and Molina – to collect premiums and report substantial profits to Wall Street. However, as fears subsided and patients resumed seeking care, profit margins for these plans began to shrink, prompting a negative reaction from financial markets. By December 1, 2025, shares of major health insurers offering MA plans had declined significantly, with UnitedHealthcare, Centene, and Molina experiencing the steepest drops at -36.11 percent, -37.46 percent, and -50.18 percent respectively. Even Humana saw a year-to-date decrease of -4.52 percent.
Increasing Pressure to Maximize Profits
MA plans are facing mounting pressure from financial markets to boost their margins, and most are responding by implementing cost-cutting measures. UnitedHealthcare, for example, has increased deductibles for prescription drugs and reduced benefits for over-the-counter medications. Like many insurers in the MA space, it now utilizes coinsurance on preferred brand-name drugs instead of fixed copayments, effectively increasing out-of-pocket costs for members. According to health consulting firm Jeffries, these changes are designed to “extract more profit from its plans, even as they attract fewer members.”
For-profit Medicare Advantage program restrictions routinely result in delays and the denial of necessary health care.
The fundamental issue, experts say, is that providing quality healthcare to MA plan members is not the primary objective. The MA business model prioritizes maintaining high profits by collecting premiums while simultaneously limiting healthcare utilization through prior authorization denials and attracting healthier members who are less likely to require expensive care. As the current open enrollment period concludes, MA plans anticipate enrolling approximately 48 percent of Medicare beneficiaries, marking the first time since the passage of the Affordable Care Act in 2010 that the share of beneficiaries in MA plans is projected to decline.
Humana, the second-largest MA provider, has pioneered a shift in strategy. Last year, the company cut its least profitable plans, resulting in a decrease in enrollment from 6.2 million to 5.8 million during the 2024 open enrollment period. The remaining plans offered fewer supplemental benefits and eliminated coverage for some higher-priced medications. This trend has now spread across the industry, with insurers altering benefits and drug formularies to encourage sicker, more costly members to leave their plans. An estimated 3 million individuals are currently enrolled in MA plans that will be terminated during this enrollment period, forcing them to seek alternative coverage.
MA plans are increasingly focused on attracting healthier seniors, and have begun cutting commissions to brokers – in some cases eliminating them entirely – to discourage enrollment of individuals likely to require expensive care. Humana, having already reduced benefits, has maintained stability for 2026, leading to increased enrollment nationwide, a development the company views with some concern.
Brokers are obligated to assist seniors in selecting plans that best meet their needs, but they often lack incentive to enroll them in plans that do not offer commissions. State insurance departments have expressed concern over insurers reducing broker commissions and discouraging enrollment of seniors expected to be more costly to care for. Since October, Idaho, Delaware, Mississippi, Montana, New Hampshire, North Carolina, Oklahoma, and South Carolina have issued warnings to health insurance companies, asserting that these practices may violate state laws. However, these departments currently lack the authority to effectively halt these practices.
The Centers for Medicare and Medicaid Services (CMS), the federal agency overseeing MA plans, has yet to intervene. Mississippi Insurance Commissioner Mike Chaney acknowledged that the ultimate responsibility for regulating MA plans lies with the federal government, but expressed skepticism about CMS taking action:
“What CMS does is send somebody that has no authority, doesn’t know a lot to answer the questions of the [state insurance] commissioners, and then just everybody gets mad … The only way you’re going to get it done is to have Dr. Oz or whoever runs the damn program to come down and sit down and say, ‘This is what the program’s about.’”
Brokers are bracing for a surge in calls from individuals seeking coverage assistance.
White House Policies Favor MA Plan Profits
The Trump administration has not only failed to protect Americans’ health insurance coverage – whether through rising ACA exchange premiums, access to MA plans, or cuts to Medicaid – but has also taken steps to actively increase MA plan profits. Under President Trump, CMS proposed changes to the calculation of star ratings – the one-to-five-star system used to assess MA plan quality performance, with higher ratings qualifying plans for lucrative bonuses.
Among the proposed changes is the reinstatement of the ‘reward factor’ and the elimination of a dozen star rating measures deemed administrative rather than focused on patient outcomes and satisfaction. This includes a measure evaluating the responsiveness of insurance company call centers, a metric that has been the subject of legal challenges from several insurers claiming downgrades due to missed or dropped calls. Humana, in particular, stands to benefit from the removal of this call center quality metric. CMS projects these changes will increase insurance company revenue by a total of $13.2 billion between 2028 and 2036 as star ratings improve.
In 2023, CMS initially announced the removal of the reward factor and a planned transition to a health equity index by 2027, which would have rewarded plans for reducing health disparities and insuring vulnerable populations. However, in late November 2025, CMS reversed course, proposing to abandon the health equity index and reinstate the reward factor.
For decades, health policy and the inequities within the US healthcare system have been shaped by government actions. CMS had begun to address these systemic inequities, but these efforts were curtailed when Trump appointees took leadership positions at the Department of Health and Human Services and Dr. Mehmet Oz assumed the role of CMS head. Even these limited steps have now been abandoned.
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