Medicare Advantage under fire: costs, care denials and plan shakeups hit seniors hard
Millions of seniors forced to switch plans as insurers pull back offerings
Affordability Watch: The hidden costs of Medicare Advantage
The political storm around Medicare Advantage is no longer just a Washington fight—it’s increasingly about what seniors pay, what care they can access, and how stable their coverage really is.
Now covering more than half of all Medicare beneficiaries, Medicare Advantage (MA) has become a dominant force in the U.S. healthcare system. But a wave of congressional scrutiny—focused heavily on insurers like UnitedHealth Group—is raising new questions about whether the program is delivering value or quietly driving up costs.
Billions in question: the “upcoding” fight
At the center of the controversy is how insurers get paid.
Medicare Advantage plans receive higher payments for sicker patients. Critics say that system has created powerful incentives for insurers to inflate patient risk scores by documenting as many diagnoses as possible—a practice often referred to as “upcoding.”
Federal estimates suggest the stakes are enormous:
Roughly $24 billion in excess payments in 2023 alone tied to coding intensity
Tens of billions more over time linked to diagnoses that may not have been treated
Lawmakers in Congress—across both parties—are now questioning whether taxpayers are subsidizing inflated payments that don’t translate into better care.
For consumers, the impact isn’t abstract. Those higher payments help drive overall Medicare spending, which in turn affects Part B premiums paid by all beneficiaries, including those not enrolled in MA plans.
Congressional heat—and a spotlight on industry leaders
The size of the program—and the scale of the dollars involved—has triggered multiple investigations.
Senate lawmakers have reportedly reviewed thousands of internal documents from major insurers examining how diagnoses are recorded and submitted. As the largest MA provider, UnitedHealth Group has drawn particular attention, though the scrutiny extends across the industry.
At issue: whether insurers are systematically maximizing payments through coding practices that may stretch—or exceed—clinical justification.
Rep. Alexandria Ocasio-Cortez (D-NY) is among the insurers’ toughest critics. At a hearing earlier this week she questioned Health and Human Services Secretary Robert F. Kennedy Jr. about his decision to send billions of taxpayer dollars to insurance giants under investigation for corporate fraud during a hearing in the Health Subcommittee of the Committee on Energy and Commerce.
Ocasio-Cortez said UnitedHealth Group, CVS Health, and other for-profit health insurance companies with Medicare Advantage plans defraud the federal government by nearly $80 billion each year. Last year, Secretary Kennedy committed to looking into that fraud.
But under industry pressure this year, Kennedy decided to increase payment rates by 2.48%, which will give these for-profit health insurers an additional $13 billion in taxpayer dollars in 2027. When this final rate notice was announced, major insurers saw their stocks skyrocket.
Whatever else it may be doing, UnitedHealth is continuing to keep its shareholders fiscally healthy. UnitedHealth Group (UNH) stock rose more than 8% in early trading on Tuesday when it beat Wall Street’s earnings expectations and raised its full-year profit forecast. Revenue in the first quarter grew to $111.7 billion, higher than the $109.2 billion anticipated by analysts.
Coverage disruptions: millions forced to switch plans
At the same time regulators are tightening payment rules, insurers are adjusting their business models—and that’s creating real-world disruption.
Recent research suggests:
About 3 million MA enrollees (roughly 1 in 10) were forced to switch plans in 2026
Insurers have cut or exited plans in certain regions, particularly in rural areas
For seniors, switching plans can mean:
Losing access to preferred doctors
Facing new prior authorization rules
Paying different out-of-pocket costs
In some cases, patients may need to start over with new provider networks, a process that can be especially difficult for those with chronic conditions.
Prior authorization and care delays
Another flashpoint: access to care.
Unlike traditional Medicare, Medicare Advantage plans frequently require prior authorization for certain services—meaning patients must get approval before receiving care.
Federal reviews have found that a notable share of denied requests would likely have been approved under traditional Medicare.
Consumer advocates argue this can lead to:
Delays in treatment
Administrative burdens for patients and doctors
In some cases, denial of medically necessary care
Insurers counter that prior authorization helps control costs and prevent unnecessary procedures.
Regulators move to rein in payments
The Centers for Medicare & Medicaid Services (CMS) is now pushing reforms aimed at reducing excess spending.
Proposed and finalized rule changes include:
Limiting the use of chart reviews not tied to actual patient visits
Adjusting risk-score calculations to reduce inflated diagnoses
The changes are expected to save billions annually, but insurers warn they could lead to:
Reduced supplemental benefits
Higher premiums
Fewer plan options
That tension—between cost control and benefit levels—is at the heart of the current policy battle.
A program at a crossroads
Medicare Advantage still offers features that make it attractive:
Low or zero premiums in many plans
Extra benefits like dental, vision and gym memberships
Annual out-of-pocket caps
But critics argue those benefits may be partly financed by overpayments and cost-shifting, raising long-term sustainability concerns.
Meanwhile, growth in MA enrollment is slowing, suggesting the program may be entering a new phase—one defined less by rapid expansion and more by regulatory scrutiny and financial pressure.
What this means
For consumers, the implications are immediate:
Premium pressure: Higher program costs can translate into higher Medicare premiums overall
Plan instability: More beneficiaries may face plan changes or forced switches
Access concerns: Prior authorization and network limits remain key friction points
For policymakers, the stakes are even larger:
Whether Medicare Advantage is saving money or costing more than advertised
How to balance private plan flexibility with consumer protections
And whether reforms can rein in costs without reducing benefits seniors rely on
Data Box: Medicare Advantage by the numbers
35.5 million — Total Medicare Advantage enrollees
~51% — Share of all Medicare beneficiaries in MA plans
$24 billion — Estimated excess payments in 2023 tied to coding intensity
~3 million — Enrollees forced to switch plans in 2026
~13% — Share of prior authorization requests denied in MA
$7+ billion — Estimated savings from recent CMS payment reforms