The Rippling Effects of Market Corrections in Medicare Advantage: Mark Meiselbach, PhD

The landscape of Medicare Advantage is currently undergoing a significant shift, as policy makers and insurers grapple with the financial realities of projected forced disenrollments.

A primary driver of this change is the growing recognition that the government has likely been overpaying for Medicare Advantage services, notes Mark Meiselbach, PhD, assistant professor at the Johns Hopkins Bloomberg School of Public Health and lead author of the study “Forced Disenrollments Among Medicare Advantage Beneficiaries Following 2026 Plan Exits,” recently published in JAMA. As efforts intensify to reduce these payments and correct the market, the consequences are beginning to surface, affecting both the profitability of insurance plans and the accessibility of care for millions of enrollees.

The move toward more accurate payment structures is a double-edged sword. When payments are reduced, some plans may find it difficult to maintain profitability. In a market-driven system, if a plan is no longer profitable, the insurer is more likely to stop offering it. Although these adjustments are seen by some as essential for the long-term sustainability of the program, the transition is far from seamless.

“In some senses, this is sort of a necessary consequence of changing and correcting the market, if you will, but the distribution is not going to be even,” Meiselbach says.

This uneven distribution means that while some markets may remain robust, others—particularly those that are already harder to serve—might see a sharp decline in options. In some regions, enrollees could be left without any Medicare Advantage plans to choose from, which creates a precarious situation for seniors who have come to rely on the supplemental benefits these plans often provide, such as transportation services and specific drug coverage.

Central to the current Medicare Advantage framework is the Star Rating System, which was designed to incentivize high-quality care. However, the system has effectively created a fraught environment in which high-rated plans receive substantial benefits, including additional bonuses and higher payments. These financial advantages allow them to offer more attractive rebates and supplemental benefits, which in turn draw in more enrollees. Conversely, lower-rated plans struggle to compete, as they lack the extra funding to provide the same level of benefits. This creates a cycle where the strongest plans continue to grow while others fall behind.

The impact of these changes is perhaps most acute in rural areas. Achieving a high star rating is not always within a plan’s control; structural factors inherent to rural health care can make it significantly harder to meet the necessary benchmarks. To prevent these regions from being left behind, there is a call for specific corrections, such as adjusting benchmark payments to account for the unique difficulties of serving rural populations. Without these targeted interventions, the structural factors of rural geography may continue to disadvantage both the plans and the enrollees who live there.