Major health systems are increasingly dropping MA plans due to high denial rates and administrative burdens, citing concerns for long-term financial sustainability. Regulatory and Policy Developments Congressman Greg Murphy, MD - Facebook
Unlike Traditional Medicare, which has an overhead of 2-3% and no profit, MA programs are required to spend at least 80% of payments on medical care, allowing for up to 20% in profit and overhead. Critical Operational Issues insurance companies ma
In 2021 alone, MA companies received 35 million prior authorization (PA) requests and denied 2 million of them. While 82% of appealed denials were eventually overturned, only 11% of patients typically file an appeal. Major health systems are increasingly dropping MA plans
In 2025, MA plans saved the Centers for Medicare & Medicaid Services (CMS) roughly $13.9 billion in administrative costs by managing 54% of eligible beneficiaries, compared to the $11.8 billion spent on the remaining 46% in Traditional Medicare. While 82% of appealed denials were eventually overturned,
Concerns have been raised regarding inaccurate provider directories that list specialists who are not actually in-network or accepting new patients.
This report provides a comprehensive overview of the Medicare Advantage (MA) sector as of early 2026, focusing on its market structure, operational challenges, and the evolving regulatory landscape.