Sharp Health Plan has begun notifying its patients that it will stop offering its own Medicare Advantage coverage in 2027, a change that will force thousands to find new, and possibly more expensive, coverage.
Officials with the region’s largest medical provider confirmed Monday what had begun to trickle out in trade publications and health insurance brokers’ offices last week. Like many other health systems across the nation, Sharp will reduce its direct exposure to the federal program that has recently left many of its peers complaining that reimbursements are not covering the cost of care.
Scripps Health pulled out of Medicare Advantage in 2023, forcing an estimated 32,000 members to find new doctors, and UC San Diego Health dropped access to its university medical group primary care network earlier this year. But Sharp is maintaining access through United Healthcare, which has long offered its own Sharp-focused plans.
Medicare Advantage is a nationwide program that allows Medicare beneficiaries, generally those age 65 and older, to have private health insurance companies manage their benefits. Otherwise, Americans can stick with original Medicare, though doing so, while it allows visiting any participating doctor, requires supplemental “medigap” health insurance and “Part D” prescription drug plans, both of which come with additional monthly premiums that many cannot afford.
While Sharp Health Plan will stop offering its current range of Medicare Advantage plans for individuals, affecting about 17,000 beneficiaries, it will continue offering group plans for local companies. And, more importantly for individuals, Sharp will continue accepting United Healthcare Medicare Advantage plans tailored for Sharp.
Chris Howard, Sharp’s chief executive officer, said late last week that the intent is to make sure that Medicare Advantage patients are in a structure that suits the program’s “capitation” model, one that pays providers a bulk amount per beneficiary to cover all of their medical needs. Providers get to keep any money left over, but they are also on the hook to cover costs that exceed bulk per-patient payments.
This sort of model, Howard said, favors plans with lots of enrollees. United Healthcare’s Sharp Medicare Advantage offerings have dwarfed those from Sharp Health Plan. Three United Healthcare-Sharp plans on offer for 2027 collectively had about 38,000 enrollees in 2026, more than twice the collective enrollment of Sharp Health Plan MA offerings that same year, according to data from the U.S Centers for Medicare & Medicaid Services.
Scale matters, Howard said, in order for the capitation model to work. The pool of patients must be large enough for those with high costs in any given year to be balanced out by those with fewer expenses.
“We have to make sure that the numbers line up so that we can have a sustainable program long term, like we do with our commercial health insurance products,” Howard said. “You can be successful in Medicare Advantage, Kaiser (Permanente) certainly is, but you have to have the scale, and you have to have the managed care infrastructure to be successful with this product.”
It does appear that maintaining access for United Healthcare Medicare Advantage plans helps lessen the sting for beneficiaries.
Sophie Exdell, manager of San Diego’s Health Insurance Counseling & Advocacy Program (HICAP), said that the Sharp-focused plans offered by United Healthcare are roughly similar in terms of premiums and medical copays to the Sharp Health Plan offerings.
Looking at the comprehensive pricing breakdowns that HICAP assembles every year, and comparing last year’s matrix to what is known for the coming open enrollment period, which starts Oct. 15, she said that the differences are not glaring.
“Both Sharp and United Healthcare have offered some plans with $0 copays for doctor visits during the last few years, and United Healthcare appears to offer that again in 2027,” Exdell said.
But, plans often charge different copays for different services, so a full comparison is a good idea for all Sharp Health Plan members who must decide whether to transition to a United Healthcare plan. And, Exdell added, patients should not forget to compare the costs of prescription drugs, which can vary dramatically from plan to plan.
While Sharp Health Plan’s exit from Medicare Advantage is by far the largest change for the coming year, local health insurance broker Pat Salas called attention to other changes as well, highlighting cuts to plans from Aetna, Central Health and others that will collectively force about 8,000 Medicare Advantage enrollees to seek new coverage this fall.
Because their current Medicare Advantage plans have been eliminated, Sharp beneficiaries have the option of switching to original Medicare. HICAP counselors are available to help determine the costs of supplemental insurance and can provide closely researched comparison charts of the options.
HICAP has more information, and Medicare beneficiaries can schedule a consultation on its website: www.elaca.org/get-help.