“The math doesn’t math. “That candid assessment from financial consultant Michael Ryan encapsulates the increasing friction between hospitals and Medicare Advantage insurers. Starting in 2026, a wave of health systems intend to cut ties with certain MA plans due to unsustainable reimbursement rates, prior authorization hurdles, and administrative strain.
These changes matter to older adults, caregivers, and policy watchers. MA now covers over half of Medicare beneficiaries, promising extra benefits along with lower premiums. Yet, when hospitals exit networks, that means narrower choices, longer travel times, and the potential for out-of-pocket surprises for patients.
Below, find a listicle that breaks down the most important developments-from the specific health systems making the exits to the underlying policy and financial pressures driving them. This also includes what these shifts mean for patient access, rural hospital survival, and the future of MA oversight.
1. Fifteen Major Health Systems Cutting Ties
Beginning in January 2026, 15 of the top health systems are abandoning several MA contracts. These include Mayo Clinic, MultiCare in Washington, Providence Clinical Network in California, Mount Sinai in New York, UNC Health in North Carolina, and Mass General Brigham in Massachusetts. Others, such as Lehigh Valley Health Network and TriHealth, have begun to end UnitedHealthcare MA contracts, while Centra Health, St. Luke’s Health System, and Montrose Regional Health are leaving Humana MA. Smaller systems such as White River Health in Arkansas and South County Hospital in Rhode Island have also announced they will no longer participate in certain plans. Each represents growing frustration over reimbursement and authorization practices.
2. Prior Authorization Burdens and Delays
Just about all MA enrollees have prior authorization for some care services, especially expensive care such as inpatient admission or chemotherapy treatments. In 2023, MA plans rendered almost 50 million prior authorization decisions and were denying 6.4 percent of the requests. While 81.7 percent of appeals were overturned, the process is often leading to delays in medically necessary treatments. As Ryan noted, “one in five requests denied was actually medically necessary.”Delays in treatment are not just paperwork, but they do affect health outcomes.
3. Lower Reimbursement Rates for Rural Hospitals
MA plans reimburse rural hospitals at roughly 90% of the traditional Medicare rate, and unlike traditional Medicare, it is not required to pay more to facilities with special designations such as Critical Access Hospitals. Jason Merkley of Brookings Health System cautioned that accepting rates at that level could result in layoffs and service cuts. Often, this financial gap makes the difference in whether or not a contract is not renewed.
4. Claim Denials Reduce Provider Revenue
A review of 270 million MA claims in 2019 showed that 17.7% were denied initially, although providers lost 7.2% of their billed dollars after appeals. Outpatient denials were higher, at 21.1%. Denial rates varied by patient demographics; Black and Hispanic beneficiaries had denials of 22.7% and 20.1%, respectively. These denials raise administrative costs and can deter providers from continuing MA participation.
5. Shrinking Plan Availability in Some States
The average beneficiary will have access to 32 MA prescription drug plans in 2026, down from 34 in 2025. Plan exits are highly concentrated in a few states: New Hampshire -13 options, Minnesota -11. In 122 counties across 13 states, less than 1% of beneficiaries will have no MA plans at all. Large insurers such as UnitedHealthcare and Humana are exiting more counties than they enter, consistent with strategic retrenchment.
6. Impact on Patient Access and Costs
When hospitals leave MA networks, patients may have to travel hours for in-network care or pay out of pocket. Kevin Thompson added that it often requires a very complex process to switch to Original Medicare: Medigap policies are usually underwritten outside guaranteed issue periods and could raise costs for those with preexisting conditions. For some, these changes equate to fewer affordable options.
7. Special Enrollment Periods Offer Limited Relief
When major providers leave MA networks, the Centers for Medicare & Medicaid Services can grant special enrollment periods allowing members to change plans or go back to traditional Medicare without penalty. However, CMS does not always publicize these periods widely, and eligibility can vary. In recent cases, such as Northern Light Health in Maine, congressional intervention was necessary to secure this relief.
8. Rural Hospital Closures and Service Cuts
From 2017 to 2024, 62 rural hospitals have closed, while 10 opened. Many have cut service lines such as obstetrics, though Medicaid covers nearly half of rural births. MA’s lower reimbursement and administrative burdens further intensify these stresses, increasing the pace at which closures may occur and reducing access to necessary care locally.
9. Policy Proposals to Address MA Strains
Advocates recommend reform including aligning MA with traditional Medicare’s payments for care provided in rural hospitals, toughening network adequacy standards, and standardizing prior authorization processes. CMS has started an effort to align MA coverage criteria with that of traditional Medicare and increase reporting requirements, but broader legislative action-with bipartisan lawmakers on record in support-remains pending. The 2026 wave of hospital exits from Medicare Advantage networks symbolizes a critical juncture in US health care. From this perspective, there is much that seniors and caregivers can do to watchfully track coverage and the composition of provider networks.
Policymakers must balance MA’s promise of added benefits with affordable reimbursement and fair access. In their absence, the ongoing tug-of-war between insurers and providers threatens to undermine further the stability of care for millions of older adults. “The math doesn’t math.”That candid assessment from financial consultant Michael Ryan encapsulates the increasing friction between hospitals and Medicare Advantage insurers. Starting in 2026, a wave of health systems intend to cut ties with certain MA plans due to unsustainable reimbursement rates, prior authorization hurdles, and administrative strain.
