Recently, one of the big news stories in the world of Medicare Advantage has been the number of plans in cost reduction mode. For example, UnitedHealthcare would have left 109 counties for plan year 2026. In March 2025, Cigna completed the sale of its entire MA business.
Combine that with the regulatory hurdles and federal oversight facing payers, and you have one expert describing the overall MA market as being in the middle of a fundamental reset and not a difficult time to temporarily endure. With every press article about the plans being withdrawn, whether be a major national or regional playerthe most common culprit is usually the insurance company.
Tuesday, at Doctors At a conference in Las Vegas, Dawn Maroney, CEO of Alignment Health Plan, a for-profit Medicare Advantage plan, said that very often the insurance company should not be blamed. More often than not, the real culprit for withdrawing that plan is the hospital, she said. And all of this is because health systems that participate in traditional/original Medicare do not automatically benefit from participation in Medicare Advantage (Part C) plans. Which essentially means that health systems individually negotiate MA contracts with plans. In calling for a policy change that would address this problem, here is what Maroney told the audience:
“I really believe that if a hospital system does business with Medicare, original Medicare, … then they should automatically be granted [participation] to a Medicare Advantage plan,” she said.
In the absence of that, what happens is health systems sometimes charge 200% of Medicare, she said, implying that it becomes too expensive for health plans to stay in the market. Maroney added that plans like Alignment Health Plan would even be acceptable paying 100% of Medicare to health systems, but what’s happening now is health systems are charging much more than that.
“I know we would be more than happy to pay Medicare’s 100% Medicare service fee. You can charge us 100%. You can charge what you charge Medicare, but that’s the policy we have to change because when a plan pulls out, it’s usually because of the hospital system. It’s not the doctors, it’s the hospital system that comes in and says, ‘I want to charge 200% of Medicare for you to stay.’ market And then the plan looks like that of the bad guy…”
Without identifying any hospital systems, she said that looking at hospital revenue reports [presumably for-profit] hospital systems, they will find that these health systems generate 18% to 20% EBITDA. It is unclear whether she was referring only to public for-profit health systems or to not-for-profit health systems, or both. She added that:
“Another hospital system that we do business with was saying we’re losing money, we’re losing money. And I’m like, you just reported [your earnings]; you earn 13%. There’s something wrong with this. So we have to challenge that,” she said.
It is important to note here that many providers are withdrawing from MA contracts because of what they describe as insufficient reimbursement. Beckers reported that 40 health systems abandoned their MA plans in 2025. So whether health plans pull out of counties or providers abandon MA contracts citing poor reimbursement, it’s patients who suffer the most.
Public perception of health insurers is not positive. So Maroney is not wrong to suggest that the default is to blame the payers for everything. It is true that payers are not responsible for all of the country’s health problems. Often, health systems escape public ire because the public’s perception of doctors is generally positive.
For example, pharmaceutical companies and, more recently, PBMs have been lambasted for their greed and blamed for high drug prices and one of the reasons health care costs continue to rise. But if there is one entity responsible for the lion’s share of healthcare spending in a given year, it’s provider organizations. See below a pie chart of the nation’s healthcare spending for 2024 according to CMS.
Coming back to Maroney – and even recognizing the hospital’s true share of healthcare costs – it is difficult to change the public’s perception of payers, especially when compared to opinion of providers and provider organizations. Indeed, even if payers see their profits decrease considerably, they remain profitable. The National Board of Insurance Commissioners reported that in 2024, the insurance industry’s net profit fell from $25 billion to just $9 billion.
Compare that to the financial plight of hospitals: According to Kaufman Hall data, 37% of U.S. hospitals lost money in 2024.
Photo: Thai Noipho, Getty Images
