Insurance companies are retreating to Massachusetts. How does this affect the patient?

Faced with higher utilization and risk-adjusting changes, insurance companies appear to be supporting Medicare Advantage, which could lead to severe damage to older people, Especially considering how most seniors participate in the Medicare Advantage program compared to traditional health insurance.

UnitedHealthcare, the largest MA insurer, announced that 600,000 Medicare members will be affected by the 2026 product exit, “mainly in lower hosting products like [Preferred Provider Organization] CEO Tim Noel said in his recent earnings call.

Generally, “less management” refers to plans that are less actively managed by insurers, and often have fewer restrictions on provider choices, such as people can see experts without referrals, or fewer restrictions on previous authorizations.

Similarly, Humana hopes to withdraw from unprofitable programs and markets by the end of the year and will abandon up to 500,000 MA members by the end of the year.

Meanwhile, Aetna may reduce its MA membership by 10%, to about 420,000.

Cigna may set a precedent by announcing it will completely withdraw from the MA market in 2024.

Insurers are not only withdrawing from unprofitable areas and plans. Brooks Conway, an actuary consulting expert at Oliver Wyman, said they have also lowered benefits, increased premiums and eliminated broker committees to reduce growth in certain products.

So what does this mean for patients?

“It’s extremely disruptive. …If you have an insurance plan in place and the insurance plan is cancelled, [you now have] “This could mean they could lose their doctors. They might change where they have to go to care,” said Dr. Adam Brown, an emergency physician and founder of Abig Health.

He added that entering the fall enrollment season, some patients may be fighting for a new program where the network may be smaller and its supplemental benefits may vary. Some people may even need to switch to traditional health insurance, where they may lose some supplemental benefits, such as eye care, dental care, or gym membership.

Why insurance companies retreat

Michael Abrams, managing partner at healthcare consulting firm Numerof & Associates, said the biggest factor that led to insurers’ retreat from Medicare Advantage is the unexpected increase in the cost of medical utilization that most insurers experience.” In addition, investors have sold stocks after insurers have not earned the money this year. Therefore, this is purely a financial move to protect one's own bottom line.

“To fix their balance sheet and restore investor beliefs, the Big Five has rotated from pursuing scale and margins to pursuing scales of margins,” he added. “The result is that insurers like UnitedHealthcare, Humana and CVS Health (via Aetna) are exiting unprofitable markets, cutting down on lower and quotas of products and revising supplementary benefits to improve margins. Smaller insurers are exiting MA entirely.”

Abrams said smaller insurers include Kansas City, Premiera Blue Cross and Michigan Medicine's Blue Cross and Blue Shield.

Brown responded to Abrams’ comments on increased utilization. Medicare Advantage Insurance Company gets a sum of money from U.S. taxpayers through Medicare to care for patients. When a patient receives care, the cost of that care is paid out in one go. Therefore, MA insurers have the motivation to use as little as possible to improve their profit margins.

Brown said, in other words, “utilization is the responsibility to the insurance company.”

“With the patient's care, the money is used or used, so the amount of money they sit in the bank at the end of the day goes down. When I say that using is the responsibility for these companies, I talk about the money from an accounting perspective.”

Conway said insurance companies are also working to adapt to new risk adjustment models. The model has been staged over the past few years and has changed payments for CMS computing health plans by updating the diagnostic code and linking the risk score. As a result, many plans earn lower risk scores, which means lower payments.

Conway added that insurance companies nationwide are more common than MA and regional insurance companies. However, this may change in the near future. Regional insurers have made significant adjustments slower, but may be more inclined to expand their MA business in next year to prioritize revenue over membership, especially given the recent actions taken by larger insurers.

What happens to patients?

With the prediction of one million elderly people losing coverage, patients will have to decide whether to switch back to traditional health insurance. But while there are some possibilities, this may not be a wholesale switch given the popular supplemental benefits such as vision and tooth coverage.

Conway said they are more likely to continue their remaining MA plans to the area.

“These exports continue to generate a lot of shopping among older people,” he said. “In 2025, when regional insurers pour into membership, it’s common as national insurers exit their geography, and they become the last or last option in town. While competition is less common in some areas, there are many MA options for older people in most areas.”

Brown Less view At these exits. He fears this will begin a trend in which insurance companies exit areas with higher and lower profitability, with multiple markets limited patient options.

“Private insurers are happy to take care of the Medicare Advantage Plan when these profits roll, but when challenges arise, they tend to throw away these patients. They tend to say, “These patients are no longer profitable.” ”

For Brown, this is particularly worrying to consider MA funding people.

He accused the big health insurers of “giving up” older people, who rely on health care plans and investing profits into patients.

“These are not Wall Street money, but are included in the Medicare Advantage Plan,” he said. “These are the USDs for taxpayers whose profits come directly from taxpayers to care for people who are eligible for Medicare. … What we are seeing now is that this business model is allegedly that patient loyalty is only lasting than profits.”

Brown added that insurance companies that exited MA also hurt providers. If the new insurance plan is not outside the network, physicians may lose patients and income. It also creates an administrative burden (such as repricing to complex billing), thus limiting practical resources and threatening the stability of independent providers.

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