Impact of Hospital Discontinuation of Medicare Advantage Plans on Senior Patients

In recent years, a significant shift has occurred within the Medicare Advantage landscape, as numerous hospitals and health systems have decided to withdraw from these plans, affecting thousands of elderly beneficiaries. Medicare Advantage, which offers supplemental benefits and often more coordinated care, has become increasingly popular; in 2024, it enrolled about 54% of Medicare-eligible individuals. However, the trend of hospital departures is raising concerns about access to care and the transparency of network changes.

One notable case involves 87-year-old Fred Neary from Dallas, Texas. He had been seeing five doctors within the Baylor Scott & White Health system for years. In October, his Humana Medicare Advantage plan informed him that Baylor and Humana were unable to reach a new contract, requiring him to find new doctors or switch plans. Neary faced the challenge of losing his trusted providers during the annual enrollment period, allowing him to switch plans starting January 1. This situation underscores how plan network changes can force seniors to make difficult choices during limited windows.

Many other beneficiaries do not enjoy the same flexibility. Disputes between insurers and providers often lead to network shrinkage, with members remaining locked into their plans until annual open enrollment, unless they qualify for special enrollment periods (SEPs). Over the past 15 months, the Centers for Medicare & Medicaid Services (CMS) has operationalized roughly three-month SEPs across at least 13 states, enabling thousands to switch plans or revert to traditional Medicare mid-year.

Since July, at least 41 hospital systems across 25 states have exited at least one Medicare Advantage plan, reflecting a growing trend of provider-network disputes. These disputes have been tracked and reported, with the American Hospital Association and consulting firms noting a tripling of such separations in recent years. CMS officials note that network changes triggering SEPs are routine, although recent increases have prompted concern about transparency.

Advantage plans often offer extra benefits and lower out-of-pocket costs but at the expense of provider choice. Traditional Medicare grants beneficiaries the freedom to choose any provider accepting Medicare, providing more flexibility when networks contract or shrink. Some health systems, like Sanford Health, have opted to leave Advantage plans altogether, citing issues like coverage denials and delays that impact patient care.

Regulators and advocacy groups have called for expanded protections and clearer communication. They argue that seniors should be informed promptly when their healthcare providers leave a plan and should have the right to switch plans or revert to traditional Medicare without penalty. Proposed measures include offering special enrollment periods for all members affected by major provider exits and ensuring access to Medigap plans, which supplement Medicare coverage. Currently, only four states guarantee guaranteed Medigap access for those leaving Advantage plans.

The trend also influences insurer-provider relationships and raises questions about the sustainability of Medicare Advantage plans, which are projected to cost about $84 billion in 2025 due to higher payments to insurers. Critics argue this excess spending does not necessarily translate into better care but contributes to rising healthcare costs.

In response, some hospital systems and state watchdogs advocate for policy changes to protect seniors’ access to care. This includes special enrollment rights regardless of timing, transparent communication about network changes, andMedigap protections. As the dispute between providers and insurers continues, ensuring seniors are well-informed and protected remains a pressing concern for policymakers and healthcare advocates.

Source: https://medicalxpress.com/news/2025-04-hospitals-ditch-medicare-advantage-thousands.html