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Copyright 2026, American Health Law Association, Washington, DC. Reprint permission granted.
As of 2025, 54% of all Medicare beneficiaries were enrolled in Medicare Advantage (MA).54 The average Medicare beneficiary had a choice of over 42 options in which to enroll in 2025, and the total number of plans was over 3,700 across the United States (albeit a 6% decrease from 2024).55
Like other sectors of health care, however, the future of MA and Medicare Advantage Organizations (MAOs) may be uncertain. Each of the three main MA stakeholders—MAOs (the plans and payers), enrollees (the Medicare beneficiaries enrolled in MA plans), and the providers and suppliers (and vendors) who provide items and services to MA beneficiaries—are facing headwinds that may result insignificant changes to the program's operations. Additional headwinds come from the political uncertainty about health care policy in general and reorganizations at CMS.
Below is a summary of key challenges facing each category of MA stakeholders for the coming year.
MAOs. Several regulations and policies have been under review by the Trump administration, including those relating to heath equity and social determinants of health, and several items in CMS' MA Proposed Rule did not appear in the Final Rule, potentially requiring redirection of MAO emphasis and efforts but also perhaps cost savings. Proposed changes to agent and broker oversight were not finalized.56 MAOs remain subject to Risk Adjustment Data Validation (RADV) audits, but a decision issued in September 2025 ruled in favor of an MAO and vacated the RADV rule that allowed extrapolation of overpayment results. The government has appealed the decision to the Fifth Circuit.
Supplemental Benefits Vendors. MA plans are required to provide the same "basic benefits" as are covered under traditional Medicare and may provide an additional array of "supplemental benefits" that make a particular plan appealing to categories of beneficiaries. While supplemental benefits were originally limited to "health-related benefits," most commonly dental, vision, and hearing services, in2019 CMS expanded the definition to include home health aides, care giver support, adult daycare services, and therapeutic massage. In addition, Special Supplemental Benefits for Chronically Ill allow MAOs to offer additional benefits that have a reasonable expectation of improving or maintaining an enrollee's health or overall function. At least two of the largest MA providers reportedly have announced they will pare back supplemental benefits in 2026, resulting in revenue challenges for the vendors of supplemental services.57
Providers. Clinical providers of services to MAOs have long been frustrated by their relationships with MA plans, and as reported, several prominent providers stopped participating in specific payer networks or accepting their plans as covered.58 Reasons for strained relationships include poor reimbursement, difficult prior authorization practices, and slow payment schedules. Moreover, providers may be liable for claims submitted both by and to the MAO. For example, providers may be named as defendants in civil False Claims Act cases if they fail to comply with MAO coverage and payment rules specific to that MAO (all 3,700 of them), for which they received payment from the MAO (who received payment from Medicare).59 DOJ identified at least one medical group and related parties as defendants in a case alleging falsification of diagnosis codes to increase payments to an MAO.60
Enrollees. As noted above, the total number of plan options for enrollees has decreased, albeit still seemingly adequate. Although the CMS Calendar Year 2024 Final Rule clarified several important provisions designed as beneficiary protections, concerns continue to percolate, particularly with respect to the MAOs' approach to utilization management, which may increase wait time for services or deny them altogether. Some MAOs are cutting popular supplemental benefits. In other words, enrollees may face fewer plan choices with fewer benefits. In 2025, MA payments are 20% more per person than for similar beneficiaries in traditional Medicare, potentially capturing the focus of CMS or Congress for cuts in MAO payments that will lead to reduced services provided to enrollees.
Takeaways. While the United States continues to struggle to find its way to adequate and cost-efficient health care, stakeholders including MAOs, beneficiaries/enrollees, and providers and vendors may face more immediate changes in the year to come.
Footnotes
54. Nancy Ochieng et al., Medicare Advantage in 2025: Enrollment Update and Key Trends, Kaiser Family Found. (July 28, 2025), https://www.kff.org/medicare/medicare-advantage-enrollment-update-and-key-trends/.
55. Meredith Freed et al., Medicare Advantage 2025 Spotlight: A First Look at Plan Offerings,
Kaiser Family Found. (Nov. 15, 2024), https://www.kff.org/medicare/medicare-advantage-2025-spotlight-a-first-look-at-plan-offerings/#:~:text=Number%20of%20Plans%20Available%20to%20Beneficiaries.,only%20available%20to%20select%20populations.
56. CMS, Agent Broker Compensation, https://www.cms.gov/medicare/health-drug-plans/managed-care-marketing/medicare-marketing-guidelines/agent-broker-compensation.
57. Nona Tepper, Medicare Advantage plans edge away from supplemental benefits, Modern Healthcare (Sept., 25, 2025), https://www.modernhealthcare.com/insurance/mh-medicare-advantage-supplemental-benefits-2026/?utm_content=article1-readmore&utm_source=modern-healthcare-am&utm_medium=email&utm_campaign=20250925.
58. Jakob Emerson, Hospitals are dropping Medicare Advantage plans left and right, Becker's Hosp. Rev. (Sept.27, 2023), https://www.beckershospitalreview.com/finance/hospitals-are-dropping-medicare-advantage-left-and-right.html (Nov. 13, 2023).
59. DOJ, Press Release, Lincare Holdings Agrees to Pay $29 Million to Resolve Claims of Overbilling Medicare for Oxygen Equipment in Largest-Ever Health Care Fraud Settlement in Eastern Washington (Aug. 28, 2023), https://www.justice.gov/usao-edwa/pr/lincare-holdings-agrees-pay-29-million-resolve-claims-overbilling-medicare-oxygen.
60. DOJ, Press Release, Medicare Advantage Provider Seoul Medical Group and Related Parties to Pay Over$62M to Settle False Claims Act Suit (Mar. 26, 2025), https://www.justice.gov/opa/pr/medicare-advantage-provider-seoul-medical-group-and-related-parties-pay-over-62m-settle.
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