Health Systems Reassess Medicare Advantage Contracts Amid Rising Losses

Providers like Scripps Health, Providence, and Mayo Clinic are exiting or narrowing participation in Medicare Advantage plans due to financial pressures.

Published on Feb. 28, 2026

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Medicare Advantage now covers 55% of eligible beneficiaries nationwide, but health systems are confronting a 'sunk-cost' problem as participation in the program no longer makes financial sense. Over the past three years, Becker's has reported on roughly 90 hospitals and health systems that have terminated some or all of their commercial Medicare Advantage contracts, with at least 15 systems going out of network in 2026 alone. Executives from Scripps Health, Providence, Ascension, MemorialCare, and Mayo Clinic explain how they are reassessing their participation in Medicare Advantage and the implications for providers, payers, and patients.

Why it matters

Medicare Advantage has become a structural problem for many health systems, as the insurance product itself is a low-margin business while health systems have invested heavily in infrastructure and staffing to support it. Providers are now facing the difficult decision of whether to continue absorbing losses or exit contracts, which could lead to network disruptions and higher out-of-pocket costs for patients.

The details

Scripps Health exited nearly all of its commercial Medicare Advantage contracts in 2024, affecting 32,000 beneficiaries, after losing $75 million per year on those contracts. Since then, Scripps has not reported a quarterly loss. Providence went out of network with UnitedHealthcare MA last month, citing issues with claim denials, delays, and administrative burdens. Mayo Clinic has also ended contracts with most Humana and UnitedHealthcare Medicare Advantage plans, taking a more selective approach. Ascension is scrutinizing Medicare Advantage more closely and is prepared to hold firm on expectations around timely payment, reduced administrative burden, and patient access.

  • In 2026 alone, at least 15 systems have gone out of network with one or more Medicare Advantage plans.
  • On January 1, 2024, Scripps Health exited nearly all of its commercial Medicare Advantage contracts.
  • Last month, Providence Clinical Network went out of network with UnitedHealthcare MA.

The players

Scripps Health

A San Diego-based health system that exited nearly all of its commercial Medicare Advantage contracts in 2024, affecting 32,000 beneficiaries.

Providence

A health system based in Renton, Washington, that went out of network with UnitedHealthcare MA last month, citing issues with claim denials, delays, and administrative burdens.

Mayo Clinic

A health system based in Rochester, Minnesota, that has ended contracts with most Humana and UnitedHealthcare Medicare Advantage plans, taking a more selective approach.

Ascension

A 90-hospital system based in St. Louis that is scrutinizing Medicare Advantage more closely and is prepared to hold firm on expectations around timely payment, reduced administrative burden, and patient access.

MemorialCare Health System

A health system based in Fountain Valley, California, that has warned that seniors who attempt to buy Medigap coverage after leaving Medicare Advantage may face medical underwriting, higher premiums, or denial.

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What they’re saying

“It was a tough decision to make, but we were losing about $75 million a year on those contracts, and the payers weren't willing to negotiate the changes we needed — not just higher reimbursement, but addressing prior authorization issues and paying us what they were contractually obligated to pay.”

— Chris Van Gorder, President and CEO, Scripps Health (Becker's Hospital Review)

“If we are not seeing fair performance in how we are paid for the care we provide — and if denials and delays are not within a reasonable sphere of performance — then we are not going to continue working with that commercial payer. It's time for us to reset the way the program works.”

— Erik Wexler, President and CEO, Providence (Becker's Hospital Review)

“While I don't know exactly how this will play out, the current path — where there's massive annual disruption around network participation, plan exits and coverage drivers — is one that can't continue.”

— Dennis Dahlen, CFO, Mayo Clinic (Becker's Hospital Review)

What’s next

Providers and payers will likely continue to negotiate and renegotiate Medicare Advantage contracts, with more health systems potentially exiting or narrowing their participation in the program if the financial model does not improve.

The takeaway

The growing trend of health systems exiting or narrowing their participation in Medicare Advantage highlights the structural flaws in the program's financial model, which has become unsustainable for many providers. This could lead to increased network disruptions and higher out-of-pocket costs for patients, prompting calls for federal reform or a recalibration of the program by payers.