Medicare Advantage: What agents in the field are seeing

Two million. That's how many older Americans were displaced from Medicare Advantage plans in 2025, according to agents fielding the calls. Hospital systems pulled out of networks. Carriers dropped unprofitable plans during the annual enrollment period. And the agents who build their practices around MA found themselves scrambling to reposition clients who suddenly had nowhere to go.

Earlier this year, the Centers for Medicare and Medicaid Services proposed a near-flat 0.09% average payment increase for MA carriers in 2027 — a percentage that sent shockwaves through the industry. On April 7, CMS finalized a 2.48% average increase, a meaningful bump from the initial proposal but still well below what many carriers say they need to maintain current benefit levels. The pressure isn't letting up. It's compounding.

The economics are straightforward, and they're ugly. CMS pays carriers. Carriers pay doctors. When CMS tightens the spigot, the squeeze travels downhill. Medicare Advantage plans typically reimburse providers at roughly 90% of what original Medicare pays, according to agents who discuss reimbursement mechanics with physician offices daily. Layer on prior authorization requirements, delayed claim payments and higher denial rates, and the math stops working for a growing number of providers.

"Doctors want more money, and the carriers are being paid less," said Tony Kiepe, a licensed Medicare agent in Spokane, Wash., in a response on Medicare Agents Hub's Q&A platform, where thousands of licensed agents answer Medicare questions from the public. Kiepe pointed to specific fallout in his market: "In Spokane, Multicare and Providence are no longer accepting PPO plans." He noted that plans rated 4.5 stars receive roughly $1,500 more per enrollee annually for healthcare management than 3.5-star plans receive. This is a gap that directly affects what doctors get paid and whether they stay in a network. Even with the finalized 2.48% increase, that star-rating disparity means lower-rated plans are still feeling the squeeze hardest.

That star-rating gap matters more than most people realize. Higher-rated plans attract bonus payments from CMS, which gives carriers more room to reimburse providers competitively. Lower-rated plans can't keep up, and their networks thin out first. The result is a two-tier system forming inside Medicare Advantage itself.

Some agents are walking away from MA entirely. Ellen Diehl, a licensed agent in Holly Springs, Ga., put it bluntly: "I no longer sell advantage plans because each year hospital systems withdraw from the plans. Each AEP, carriers remove clients from their advantage plans. In 2025, two million seniors were displaced."

Diehl isn't alone in her concern, but not every agent shares her conclusion. The field is genuinely split. Many agents continue to sell MA and point to its real strengths: $0 premiums, built-in drug coverage, annual out-of-pocket maximums that original Medicare doesn't offer, and supplemental benefits such as dental and vision that seniors value. For beneficiaries on fixed incomes, those aren't small things.

But even agents who still sell MA are watching the network erosion closely. The compounding effect is what worries them most. Lower CMS payments to carriers lead to lower reimbursements to doctors, which leads to narrower networks, which leads to more displaced seniors — who then face medical underwriting if they try to move to a Medigap plan. For seniors who picked MA at 65 and are now 75, that door may be closed.

"The government increased payments to MA insurance companies by about 4.3% for 2026, but many doctors saw their actual reimbursement rates stay flat or even decrease," noted Annette Newman, a licensed agent in Riverside, Calif. "Some hospitals are dropping certain MA plans entirely because of the administrative cost." The finalized 2.48% for 2027 — while better than the initial 0.09% proposal — still lags medical inflation, suggesting the carrier-to-provider payment gap will continue widening.

The question agents are grappling with isn't whether MA is good or bad. It's whether the current reimbursement trajectory is sustainable—and what to tell the 33 million Americans enrolled in these plans if it isn't.

For now, the agents on the front lines are adapting. Some are diversifying their books toward Medigap. Others are steering clients toward higher-rated plans with stronger networks, betting that star ratings will increasingly separate winners from losers in the MA market. A few are having harder conversations with clients about what their coverage might look like in three to five years, not just next January.

The data is coming from an unlikely place: not from Washington policy shops, but from the licensed agents who sit across kitchen tables from seniors every day. Their field reports — collected across Medicare Agents Hub's Q&A platform, which hosts over 30,000 answers from agents nationwide — paint a picture of an industry in a slow-motion structural shift that hasn't fully registered in the national conversation.

The squeeze is on. The question is how long it takes everyone else to notice.

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Theo Morrill is a Miami, Fla.-based content curator and digital marketing specialist focused on the healthcare and education sectors. Contact him at [email protected].