The Medicare Advantage (MA) program has long occupied a unique space as a true public-private partnership in federal healthcare. Recent headlines have put MA back in the spotlight, with reports of plans reducing supplemental benefits, exiting certain markets, focusing on margins, and operating under tighter scrutiny. Together, these developments have fueled a perception that the MA program is in trouble. For plans that are newer to the market or operate at a smaller scale, the current environment can feel particularly unsettled.
However, this moment is better framed as a reset, not a collapse.
After years of rapid expansion, expectations around accountability, oversight, and beneficiary protection are becoming clearer, while plans are dealing with higher medical costs and shifting patterns of care.
Moments like this can feel disruptive because a lot of long-standing assumptions are being tested at once. But they also create opportunity. A maturing policy environment brings sharper focus on sustainable growth, transparency, and outcomes, rather than just on scale.
Today’s adjustment offers insight into what the next phase of the program is focusing on and will subsequently reward, and why this moment matters, especially for newer and regional plans.
The cumulative shift in MA policy and oversight
We didn’t get here overnight or through a single regulatory change. The current state of MA is due to a build-up of policy and oversight changes over multiple years that are now reshaping expectations for plans.
Across recent administrations, the Centers for Medicare & Medicaid Services (CMS) have steadily moved the program from a growth-first posture toward clearer oversight, stronger accountability, and greater emphasis on beneficiary protection. While the tools have changed over time, the direction hasn’t: clearer expectations around risk adjustment, marketing, networks, and plan behavior, as well as increased scrutiny of how plans’ decisions affect beneficiaries.
| Medicare Advantage Policy Evolution Over the Last Decade (2017-2026) | |
| Trump – First Administration | Growth-oriented approach; flexible, selective enforcement |
| Biden Administration | Heightened oversight and enforcement; stronger focus on equity and beneficiary protection; clearer expectations for plan behavior |
| Trump – Second Administration | Focus on reduced program friction with continued fraud scrutiny; value over scale expectations |
In that context, today’s market realignment isn’t a warning but a signal. It reflects how a maturing program adjusts as expectations around oversight and accountability become clearer. Going forward, success will depend not just on compliance, but on plans demonstrating how they are improving outcomes for beneficiaries.
Why scale and rapid growth no longer offer the same protection
For much of the program’s expansion, size and growth functioned as insulation. Larger footprints helped plans spread risk, weather changes in utilization, and offset an underperforming market with gains in another. That dynamic is changing. As expectations become clearer and medical costs rise, size alone no longer guarantees stability. Now, size can even work against plans by potentially slowing decision making, weighing them down with legacy systems, and making benefit designs less flexible.
What this means in practice is that success is becoming less about how fast or how broadly a plan can grow, and more about how well it understands its populations, works with providers, and adapts to clearer expectations.
Where smaller and newer plans may be positioned differently
Although this new environment puts real pressure on smaller and newer MA plans, it also creates real opportunity. While these plans often feel changes in medical costs and utilization more directly, they also bring strengths that larger organizations can struggle to replicate, such as closer relationships with providers, clearer benefit designs, leaner operations, quicker decision making, and a sharper focus on specific populations.
Those advantages matter more when flexibility and focus count more than sheer size. Smaller plans also tend to be more agile in how they adopt technology. With fewer legacy systems and simpler operations, they can often test, adopt, and scale new tools — including AI — more quickly and adapt as technologies evolve. That flexibility can be meaningful in a market where expectations are changing and plans need to respond in real time.
Operating in this way also requires plans to see what’s happening on the ground and explain decisions more clearly to both internal and external stakeholders. In that context, technology can play a supporting role. For example, tools like AI may help plans spot emerging trends sooner, manage care workflows more efficiently, or better explain how decisions are made. But technology doesn’t change the direction of the program or replace accountability. It simply offers another way for plans to operate with greater clarity in a system that increasingly values transparency and outcomes.
The challenge that remains, of course, is volatility. With rate updates struggling to keep up with rising medical costs, smaller plans are likely operating in a much tighter margin environment, leaving less room for error in pricing.
In this environment, outcomes are becoming a bigger part of the conversation, and for smaller and regional plans, attention is shifting from checking boxes to how care decisions actually affect beneficiaries. While policy sets expectations, storytelling shows what those expectations look like in practice and helps sustain Medicare Advantage as both a credible policy model and an operationally viable program.
Photo: designer491, Getty Images
Deepti Loharikar is a healthcare policy strategist and trained attorney with Venable LLP who advises national stakeholders and guides clients on federal regulatory strategy, agency engagement, and emerging health policy trends. She brings a cross-HHS perspective shaped by her work at HRSA, where she led Affordable Care Act implementation for rural communities, and at CMS, where she developed oversight strategies for the CO-OP Program.
Before joining Venable, Deepti held senior roles at national healthcare associations, directing federal regulatory strategy for a behavioral health organization, where she founded and chaired its Policy Council. She also served as director of federal and state public policy for a national trade association, guiding advocacy initiatives and shaping policy across pharmacy, privacy, and healthcare access. Drawing on experience as a healthcare attorney, federal official, and association leader, Deepti provides strategic guidance to help clients navigate regulatory change and advance policy objectives.
Daniel Fellenbaum is a Senior Director at Penta, where he advises clients at the intersection of policy, business, and stakeholder strategy, including strategic communications. An attorney specializing in healthcare policy, he focuses on Medicare Advantage, pharmaceutical policy, and emerging AI innovation in healthcare. He counsels clients on federal policy, congressional dynamics, and the evolving payer landscape, drawing on experience at organizations including UnitedHealth Group, Cencora, and PhRMA. His work helps shape strategies that improve patient access, affordability, and health outcomes.
He began his career advising a Member of Congress and representing companies on government affairs and policy issues. He holds a J.D. from Cleveland State University College of Law and a B.A. from The Ohio State University.
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