A growing wave of hospitals and health systems across the US has terminated or declined to renew their Medicare Advantage contracts in 2025 and 2026. For the millions of seniors whose care depends on those hospitals, the consequences range from disrupted specialist relationships to emergency-only coverage at facilities they’ve used for years. Here’s what’s driving the trend and what you should do now.
Why Hospitals Are Walking Away
The decision by hospitals to drop Medicare Advantage contracts comes down to three structural problems that have compounded over the past several years:
1. Reimbursement Rates Below Sustainability
Medicare Advantage plans reimburse hospitals at rates that are typically 15–25% lower than what Original Medicare pays for the same services. For years, hospitals accepted lower rates in exchange for guaranteed patient volume from large MA enrollment bases. As healthcare costs have risen sharply—labor costs, supply chains, and technology—that math has broken down.
Hospital finance executives have publicly stated that MA reimbursements in many markets no longer cover the cost of delivering care, let alone generate the margin needed to fund capital investment and staff retention.
2. Prior Authorization Administrative Burden
Beyond reimbursement, hospitals cite the administrative cost of prior authorization as a growing and unsustainable burden. Every prior authorization request requires clinical staff time to document, submit, follow up, and appeal. For a large hospital system processing thousands of MA claims monthly, this represents millions of dollars in administrative overhead that Original Medicare does not impose.
The American Hospital Association has estimated that hospitals spend an average of nearly $45 per prior authorization transaction. Multiply that by high-volume MA plans requiring authorization for a wide range of services, and the administrative drain is substantial.
3. Delayed and Disputed Payments
Multiple hospital CFOs have cited slow and contested payment practices by MA insurers as a contributing factor. Claims that Original Medicare would process and pay within weeks can be delayed months under MA contracts — with retroactive audits and recoupment demands adding further unpredictability to hospital revenue cycles.
⚠️ This trend is accelerating, not reversing. CMS tightened MA reimbursement rates for 2025 and 2026, increasing financial pressure on MA insurers, who in turn reduce payments to providers. The structural forces driving hospital exits are strengthening. Beneficiaries should not assume their current hospital network is stable from year to year.
Which Types of Hospitals Are Most Affected
| Hospital Type | MA Contract Risk | Reason |
|---|---|---|
| Academic medical centers / teaching hospitals | High | Higher cost structures and complex patients drive up MA losses |
| Rural and critical access hospitals | High | Limited negotiating leverage; thin margins can’t absorb MA shortfalls |
| Cancer centers and specialty hospitals | High | High-cost services, frequent prior authorization requirements, and MA denials most impactful |
| Large regional hospital systems | Moderate-High | Increasingly willing to walk away to strengthen negotiating position |
| For-profit community hospitals | Lower | Generally more flexible on pricing; volume matters more to margins |
How to Find Out If Your Hospital Dropped Your Plan
- Call your hospital’s patient access or billing departmentAsk directly: “Is [your specific plan name and insurer] still an in-network plan at your facility for 2026?” Don’t rely on online directories alone—they are frequently months out of date.
- Check your plan’s online provider directory: Log into your MA plan’s member portal and search for your hospital. Cross-reference with the hospital’s own website, which may list accepted insurance plans.
- Call 1-800-MEDICARE Representatives can help you verify your plan’s current network status and confirm whether a specific facility is covered under your plan.
- Review your Annual Notice of Change (ANOC) Your plan must send an ANOC each September detailing changes to your coverage, network, and costs for the upcoming year. Review it carefully for any hospital or provider removal notices.
- Do this every October before AEP closes. Network changes take effect January 1. Verify all your key providers—hospitals, specialists, imaging centers, and labs—are still in-network before the December 7 Annual Enrollment Period deadline.
Your Rights When Your Hospital Leaves Mid-Year
If your hospital exits your plan’s network while you’re in active treatment, federal rules protect you:
- Continuity of care: You have a right to continue care with the same provider at in-network cost-sharing rates for a transition period—typically 90 days for ongoing treatment
- Active treatment protection: For serious ongoing treatments (chemotherapy, post-surgical care, pregnancy), your plan must allow continuation until a natural completion point at in-network rates
- Network adequacy complaints: If your plan cannot provide an adequate in-network alternative, file a complaint with 1-800-MEDICARE—CMS can require the plan to cover out-of-network care at in-network cost
- Special Enrollment Period: Significant network disruptions may qualify you for an SEP to switch plans—contact 1-800-MEDICARE to confirm
The Original Medicare Alternative
Original Medicare does not have provider contracts in the way MA plans do. A hospital participates in Medicare as a whole—not in individual insurer networks. As long as a hospital accepts Medicare (which virtually all US hospitals do), it accepts Original Medicare for all Medicare beneficiaries regardless of their supplement plan.
When a hospital drops a Medicare Advantage contract, beneficiaries on Original Medicare are completely unaffected. Their relationship with the hospital doesn’t change. This is one of the most underappreciated structural advantages of Original Medicare for beneficiaries with established care relationships.
💡 If your hospital or oncologist has dropped your MA plan — or you’re worried they might — this is the most important time to evaluate whether returning to Original Medicare + Medigap makes sense. If your plan termination qualifies as a guaranteed issue event, you can get Medigap without underwriting. Act before your MA plan’s termination date.
Frequently Asked Questions
Why are hospitals dropping Medicare Advantage plans?
Three main reasons: MA plans pay hospitals 15–25% less than Original Medicare (financially unsustainable as costs rise), prior authorization creates overwhelming administrative costs, and delayed or disputed MA claim payments disrupt hospital revenue cycles.
How do I find out if my hospital dropped my Medicare Advantage plan?
Call your hospital’s billing or patient access department directly and ask. Also check your plan’s online provider directory — but always verify by phone. Review your Annual Notice of change each September for network changes taking effect January 1.
What happens if my hospital drops my Medicare Advantage plan mid-treatment?
You have a 90-day continuity of care transition at in-network rates. For active ongoing treatments, you may continue until a natural completion point. Contact your plan immediately to invoke continuity of care rights—don’t assume they’ll proactively offer them.
Can I switch Medicare plans if my hospital drops Medicare Advantage?
Significant network disruptions may qualify you for a Special Enrollment Period. Contact 1-800-MEDICARE to confirm. If your plan itself is terminating, you have guaranteed issue Medigap rights—apply before the termination date.
Does Original Medicare work at all hospitals?
Original Medicare is accepted at virtually every US hospital that participates in the Medicare program — the vast majority. There are no plan-specific contracts to lose. A hospital that drops an MA contract has no impact on Original Medicare beneficiaries.
Is Your Hospital Still In Your Plan’s Network?
If not—or if you’re unsure—now is the time to compare Original Medicare + Medigap. No network risk, no contract uncertainty. Free quotes, no obligation.
