Medicare Advantage (MA) plans now cover over 54% of eligible beneficiaries, but enrollees are facing a reduction in “extra” benefits as insurers grapple with rising medical costs and regulatory changes. Roughly 60% of plans weakened their benefits in 2026; many individual plans dropped or reduced popular perks like dental, fitness, meals, and over-the-counter (OTC) items.
The reason is CMS is pushing for more value-based models that reward providers for patient outcomes rather than service volume. Value-based care is a healthcare delivery model that reimburses providers based on patient health outcomes, quality of care, and efficiency, rather than the volume of services (fee-for-service). It prioritizes preventive care, patient experience, and care coordination to reduce costs and hospital readmissions and manage population health.
Currently we have two types of Medicare Advantage plans in our area—Preferred Provider Organizations (PPO) and Health Maintenance Organizations (HMO). PPO plans allow one to utilize covered services with providers that are in and out of network.
If using a provider outside of the network, the cost share is higher than using those inside the network, and referrals are often not required. On the HMO plan, one uses services with providers that are contracted with the carrier—in network. Typically, the primary care provider is required to refer one to see specialists. As a result, the HMO plan model of care can better control the cost of care, but also when and where one receives care. In many areas of the country, carriers discontinued their PPO
Because many PPO plans had their benefits reduced, HMO plans became a more appealing option for enrollees seeking popular added perks. To add even more stress on the system and access to care, approximately 5% of U.S. doctors have officially withdrawn from Medicare participation due to reimbursement rates that often fall below the cost of care. There are also Medicare Advantage plans designed specifically for those on Medicare and Medicaid, as well as those with specific chronic illnesses or in institutions.
Medicare Advantage plans are contracts with private insurance carriers to cover Medicare patients, but those private companies must follow rules set by Medicare. Medicare Advantage offers patients a cap on what they will pay during a year, whereas traditional Medicare does not, which usually requires patients to also carry Medigap or other supplemental insurance. However, the limitations of these newer plans are that patients are required to use in-network providers, and there are usually many prior authorizations needed to access care. These often delay care, add costs for providers, and limit access to care if patients do not pursue appeals for prior authorization denials.
The trend of the future is to consider moving from the Medicare Advantage plan to original Medicare plus a Medigap if you are looking for flexibility of where to get care and still have protection for your cost share of covered services based on the selected Medigap plan. This will give you access to care anywhere in the United States for medically necessary services covered by Medicare performed by a provider that accepts Medicare. The challenge with this option is that Medigap is a financial insurance product, so unless you are new to Medicare or your plan was terminated, in most cases you must be medically underwritten to qualify. There are numerous plans available in our area and at different price points.
There are limited times when you can change your Medicare plan, but you can always explore your options and create a game plan. Learn about the options that may be right for you and become empowered in your choices.
