Maryland's Medicare Advantage Crisis Threatens Coverage for Thousands of Seniors
Maryland's unique hospital payment system and the elimination of state grants are forcing major insurance providers to consider withdrawing Medicare Advantage plans, potentially disrupting healthcare coverage for tens of thousands of retirees who rely on supplemental benefits.
Tens of thousands of Maryland retirees face potential disruption to their healthcare coverage as major insurance providers consider terminating Medicare Advantage plans for the coming year. Approximately 25% of Maryland's 1.1 million Medicare recipients utilize these supplemental programs, which provide additional services such as vision, dental, and transportation assistance not covered by traditional Medicare.
The crisis stems from Maryland's unique hospital payment system, where the Health Services Cost Review Commission (HSCRC) sets hospital rates under the Total Cost of Care model. Insurance carriers pay higher hospital rates than in other states while receiving lower federal reimbursement rates for Medicare Advantage services, creating significant financial pressure. Mark Puente, CEO of Alterwood Health, stated that "the losses that the Medicare Advantage plans have incurred over the last couple of years have continued to grow."
Maryland's Medicare Advantage participation rate of under 27% ranks among the lowest nationally, trailing most states where at least 50% of Medicare recipients participate in these plans. The state had previously offered grants to insurers through the HSCRC to stabilize the market, but this temporary solution is ending. Former HSCRC Commissioner Adam Kane explained that the grants were intended as a stopgap measure while awaiting a permanent federal solution to harmonize Maryland's hospital model with Medicare Advantage reimbursement.
The potential exits could mirror previous disruptions, such as when Johns Hopkins Medicine terminated plans for Baltimore City residents in 2021, affecting 5,000 seniors. Andrew Rosenberg, president of Health Resource Advisors, emphasized that coverage changes can severely impact seniors who rely on consistent healthcare services, stating that "any type of change is not good for seniors" and disrupts continuity of care.
Major insurers including Aetna, Humana, Cigna, and United Healthcare operate in Maryland's market, though company representatives declined to comment on specific 2026 offerings until the Medicare Annual Enrollment Period begins in October. A CareFirst spokesperson expressed concern that "Maryland seniors don't have access to the same affordable, high-quality Medicare Advantage plans available to seniors all across the country."
Hope for resolution may come from ongoing negotiations between state and federal officials regarding the States Advancing All-Payer Health Equity Approaches and Development (AHEAD) model, which could provide solutions to stabilize Medicare Advantage in Maryland. Puente remains hopeful that "the state and federal government are diligent in coming up with a solution that protects the Maryland Medicare beneficiaries" as the market faces this critical transition.