Medicare Advantage Carriers Under Fire

By Mike Martin · Your Medicare & Health Insurance Agent · Updated March 2026

Medicare Advantage plans have been under increasing scrutiny from regulators, lawmakers, and consumer advocates. While these plans offer attractive extra benefits like dental and vision coverage, there's growing concern about claim denials, shrinking provider networks, and the impact of commission cuts on the agents who help seniors navigate their options.

What's Happening

Federal investigators have found that some Medicare Advantage insurers deny prior authorization requests at alarming rates — sometimes for services that would have been automatically approved under Original Medicare. This has led to delays in care for beneficiaries who need treatments, surgeries, and specialist referrals.

Network Restrictions

Another growing concern is the narrowing of provider networks. Each year, some Medicare Advantage plans drop hospitals and physician groups from their networks, leaving beneficiaries scrambling to find new providers or facing higher out-of-pocket costs for out-of-network care. This is particularly frustrating for seniors with established relationships with their doctors.

Commission Cuts and Agent Access

Several major insurers have cut or eliminated commissions for agents who enroll clients in Medicare Advantage plans. While this may seem like an internal industry issue, it directly affects beneficiaries. When agents aren't fairly compensated, fewer agents offer personalized help to seniors navigating their options — leaving more people to figure out the complex Medicare system on their own.

What This Means for You

If you're currently on a Medicare Advantage plan, it's important to review your plan each year during the Annual Election Period. Check that your doctors are still in-network, verify that your medications are still covered, and compare your plan's costs to alternatives. If you're considering switching to Original Medicare with a Medigap supplement for more flexibility, an independent agent can help you weigh the pros and cons.

2027 Update: CMS Proposes Near-Flat Payment Rates

In January 2026, CMS released its proposed payment rates for Medicare Advantage in 2027 — and the numbers sent shockwaves through the industry. The proposed increase? Just 0.09%, essentially flat funding at a time when medical costs continue to rise sharply.

To put that in perspective, the 2026 rate increase was 5.06%. Industry insiders had expected something in the 4–6% range for 2027. Instead, they got virtually nothing.

What This Could Mean for Benefits

According to an analysis by Wakely Consulting Group commissioned by AHIP, the insurance industry's trade association, the impact on beneficiaries could be severe:

• 50% reduction in supplemental benefits like dental and vision for plans trying to maintain $0 premiums
• $1,000 increase in out-of-pocket cost exposure for seniors
• $23/month premium increase (about $550/year for a senior couple) if plans try to maintain current benefits
• Approximately 70% of MA beneficiaries live in counties projected to experience payment cuts

Major insurers like UnitedHealthcare have already signaled they may exit additional markets if the rates are finalized. Health insurer stocks dropped sharply — Humana, UnitedHealth, and CVS all fell more than 14% in a single day after the announcement.

Why This Is Happening

CMS is tightening its risk adjustment model and cracking down on a practice called "upcoding," where insurers use chart reviews unlinked to actual patient encounters to inflate risk scores and increase their payments. CMS says the changes are about payment accuracy and program sustainability. Insurers say the funding doesn't keep pace with the real cost of care.

The final rates are expected by April 6, 2026, with plan bids due June 1. Seniors will see the impact when they receive their plan options during the Annual Election Period in the fall.