{"id":1405151,"date":"2026-02-08T10:10:06","date_gmt":"2026-02-08T15:10:06","guid":{"rendered":"https:\/\/www.thenewsherald.com\/?p=1405151&preview=true&preview_id=1405151"},"modified":"2026-02-08T10:10:43","modified_gmt":"2026-02-08T15:10:43","slug":"sick-of-fighting-insurers-hospitals-offer-their-own-medicare-advantage-plans","status":"publish","type":"post","link":"https:\/\/www.thenewsherald.com\/2026\/02\/08\/sick-of-fighting-insurers-hospitals-offer-their-own-medicare-advantage-plans\/","title":{"rendered":"Sick of fighting insurers, hospitals offer their own Medicare Advantage plans"},"content":{"rendered":"

By Susan Jaffe, KFF Health News<\/strong><\/p>\n

Ever since Larry Wilkewitz retired more than 20 years ago from a wood products company, he\u2019s had a commercial Medicare Advantage plan from the insurer Humana.<\/p>\n

But two years ago, he heard about Peak Health, a new Advantage plan started by the West Virginia University Health System, where his doctors practice. It was cheaper and offered more personal attention, plus extras such as an allowance for over-the-counter pharmacy items. Those benefits are more important than ever, he said, as he\u2019s treated for cancer.<\/p>\n

\u201cI decided to give it a shot,\u201d said Wilkewitz, 79. \u201cIf I didn\u2019t like it, I could go back to Humana or whatever after a year.\u201d<\/p>\n

He\u2019s sticking with Peak Health. Members of Medicare Advantage plans, a privately run alternative to the government\u2019s Medicare program, can change plans through the end of March.<\/p>\n

Now entering its third year, Peak Health has tripled its enrollment since last year, to \u201cnorth of 10,000,\u201d said Amos Ross, its president. It expanded from 20 counties to 49, he said, and moved into parts of western Pennsylvania for the first time.<\/p>\n

Although hospital-owned plans are only a sliver of the Medicare Advantage market, their enrollment continues to grow, reflecting the overall increase in Advantage members. Of the 62.8 million Medicare beneficiaries eligible to join Advantage plans, 54% signed up last year<\/a>, according to KFF, the health information nonprofit that includes KFF Health News. While the number of Advantage plans owned by hospital systems is relatively stable, Mass General Brigham in Boston and others are expanding their service areas and types of plan offerings.<\/p>\n

Health systems have dabbled in the insurance business for years, but it\u2019s not for everyone. MedStar Health, serving the greater Washington, D.C., area, said it closed its Medicare Advantage plan at the end of 2018, citing financial losses.<\/p>\n

\u201cIt\u2019s a ton of work,\u201d said Ross, who spent more than a decade in the commercial health insurance industry.<\/p>\n

Like any other health insurer, hospitals entering the business need a back-office infrastructure to enroll patients, sign up providers, fill prescriptions, process claims, hire staff, and \u2014 most importantly \u2014 assure state regulators they have a reserve of money to pay claims. Once they get a state insurance license, they need approval from the federal Centers for Medicare & Medicaid Services to sell Medicare Advantage policies. Some systems affiliate with or create an insurance subsidiary, and others do most of the job themselves.<\/p>\n

Kaiser Permanente, the nation\u2019s largest nonprofit health system by revenue, started an experimental Medicare plan in 1981 and now has nearly 2 million people enrolled in dozens of Advantage plans in eight states and the District of Columbia. The Justice Department announced Jan. 14 that KP had agreed to pay $556 million<\/a> to settle accusations that its Advantage plans fraudulently billed the government for about $1 billion over a nine-year period.<\/p>\n

Last year, UCLA Health introduced two Medicare Advantage plans in Los Angeles County, the most populous county in the United States. Other new hospital-owned plans have cropped up in less profitable rural areas.<\/p>\n

\u201cThese are communities that have been very hard for insurers to move into,\u201d said Molly Smith, group vice president for public policy at the American Hospital Association.<\/p>\n

But Advantage plans offered by hospitals have a familiar, trusted name. They don\u2019t have to move into town, because their owners \u2014 the hospitals \u2014 never left.<\/p>\n

Bad Breakups<\/strong><\/h4>\n

Medicare Advantage plans usually restrict their members to a network of doctors, hospitals, and other clinicians that have contracts with the plans to serve them. But if hospitals and plans can\u2019t agree to renew those contracts, or when disputes flare up \u2014 often spurred by payment delays, denials, or burdensome prior authorization rules \u2014 the health care providers can drop out.<\/p>\n

These breakups, plus planned terminations and service area cuts, forced more than 3.7 million Medicare Advantage enrollees to make a tough choice last year: find new insurance for 2026 that their doctors accept or, if possible, keep their plan but find new doctors.<\/p>\n

About 1 million of these stranded patients had coverage from UnitedHealthcare, the country\u2019s largest health insurer. In a July earnings update for financial analysts, chief financial officer John Rex blamed the company\u2019s retreat on hospitals, where \u201cmost encounters are intensifying in services and costing more.\u201d<\/p>\n

The turbulence in the commercial insurance market has upset patients as well as their providers. Sometimes contract disputes have been fought out in the open, with anxious patients in the middle receiving warnings from each side blaming the other for the imminent end to coverage.<\/p>\n