One big news from the world of Medicare Advantage recently has been the number of plans that are in retrenchment mode. For instance, UnitedHealthcare reportedly exited 109 counties for the 2026 plan year. In March 2025, Cigna completed the sale of its entire MA business.
Combine that with regulatory headwinds and federal scrutiny payers are facing, and you have one expert describing the overall MA market as being in the middle of a fundamental reset and not a rough patch to be temporarily endured. With every news article about plan retrenchment, whether it , the most common culprit is generally the insurance company.
On Tuesday, at the Medicarians conference in Las Vegas, Dawn Maroney, the 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 that plan pulling out is the hospital, she declared. And it all stems from the fact that health systems that participate in traditional/original Medicare are not automatically granted participation in Medicare Advantage (Part C) plans. Which essentially means health systems negotiate MA contracts with plans individually. Asking for a policy change that would change this, here’s what Maroney told the audience:
“I really believe if a hospital system is doing business with Medicare, original Medicare, … then they should be automatically granted [participation] to a Medicare Advantage plan,” she said.
Absent that, what is happening is that health systems are sometimes charging 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 be even OK paying 100% of Medicare to health systems, but what’s happening now is that health systems are charging much more than that.
“I know we would be more than happy to pay that Medicare fee-for-service at 100% of Medicare. You can charge us 100%. You can charge whatever you’re charging Medicare, but that is the policy we need to change because when a plan is pulling out, it’s usually because of the hospital system. It’s not the docs, it’s the hospital system that’s coming in and saying, “I want to charge 200% of Medicare for you to stay in the market.” And then the plan looks like the bad guy….”
Without identifying any hospital system, she said that if one reviews earnings report of [presumably for-profit] hospital systems, they will find that these health systems are earning 18%-20% EBITDA. It’s not clear if she was referring only to public, for-profit health systems or non-profit health systems or both. She added that:
“Another hospital system we’re doing business with was saying we’re losing money, we’re losing money. And I’m like, you just reported [your earnings]; you’re making 13%. There’s something wrong with that. So we need to challenge that,” she declared.
It’s important to note here that many providers are bowing out of MA contracts because of what they describe as inadequate reimbursement. Beckers reported that 40 health systems dropped MA plans in 2025. So whether health plans pull back from counties or providers drop MA contracts citing poor reimbursement, it’s the patients that suffer the most.
Public perception of health insurers is not positive. So, Maroney is not incorrect to imply that the default is to blame payers for everything. It is true that payers are not responsible for all of the nation’s healthcare woes. Often, health systems are spared the public’s wrath because public perception of doctors is generally positive.
For instance, pharma companies and, more recently, PBMs have been castigated for their corporate greed and blamed for high drug prices and one reason why healthcare costs keep going higher. But if there’s one entity that is responsible for the lion’s share of healthcare expenses in any given year, it’s actually provider organizations. See below a pie chart of the nation’s 2004 healthcare expenses according to CMS.
Coming back to Maroney — and even acknowledging the hospital’s true share of healthcare costs – changing public perception on payers is tough, especially when compared with sentiment toward providers and provider organizations. That’s because where payers are seeing profits drop significantly, they are still profitable. The National Commission of Insurance Commissioners reported that in 2024, .
Compare that to the financial fate of hospitals — per Kaufman Hall data, 37% of American hospitals lost money in 2024.
Photo: Thai Noipho, Getty Images
