By Jonathan Cassady, Healthcare Sales Executive (Feb. 3, 2026.)

The “good old days” of easy Medicare Advantage top-line growth are officially over. With a nearly flat 0.09% revenue increase proposed for 2027, all major insurers, UnitedHealth Group Humana, and CVS Aetna (to name a few) saw their stocks plummet 15 - 20%, last Tuesday, signaling that Wall Street understands what plan executives now face: a future where margins must be earned through medical cost management.

The Industry Reacts to a New Reality

The 2027 Advance Notice has prompted heightened concern across the Medicare Advantage sector. Tim Noel, CEO of UnitedHealthcare’s Medicare & Retirement business, described the proposal as  "disappointing" and warned that, if finalized, it could lead to, “very meaningful benefit reductions,” (and potential market exits).

AHIP spokesperson, Chris Bond reinforced the industry’s concerns: "Flat program funding at a time of sharply rising medical costs and high utilization of care will impact seniors' coverage. If finalized, this proposal could result in benefit cuts and higher costs for 35 million seniors."

As the industry reels, CMS Administrator Dr. Mehmet Oz described the flat rates as a move toward "payment accuracy," stating: "These proposed payment policies are about making sure Medicare Advantage works better for the people it serves... while protecting taxpayers from unnecessary spending that is not oriented towards addressing real health needs."

Regardless of perspective on the proposal itself, it signals a clear shift ahead. Leadership teams across the industry are now engaging closely with actuarial and clinical partners to identify where durable value can still be created.

This is the first of three articles in a series where I’m going to lay out opportunities and strategies related to the high-cost of dementia for Medicare Advantage plans and Medicare Supplement, or MediGap, plans.

The Strategy Shift: Find the Opportunities Hiding in Plain Sight

Reducing ancillary benefits such as dental or vision benefits may provide short term financial relief, but often comes at the expense of  member satisfaction and retention. A more durable  strategy—one that protects revenue while improving MLR (Medical Loss Ratio)—is to address the underlying cost drivers within the most complex population: members living with dementia.

This is where dementia-focused care models become increasingly important. As discussed by Dr. John Mach, at January’s Medicare Advantage Innovations Conference, dementia care represents one of the most significant, and overlooked, cost opportunities for payers today.

As constrained rates and rising utilization converge, leading plans are reassessing how they manage high-cost populations and evaluating partners that can help them perform effectively in the 2026-2027 rate environment.

1. The MA Revenue Play: Capturing the 60% Diagnosis Gap

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In a flat-rate environment, accurate risk adjustment (RAF) becomes increasingly important. Yet, dementia remains one of the most under-reported conditions in Medicare. At the same Medicare Advantage Innovations conference, a plan CMO with accountability for their MA population captured the challenge succinctly when he said, “Population Health without revenue alignment is philanthropy.”

This is not upcoding. It is diagnostic accuracy. Improving the consistency and completeness of condition documentation ensures that plans are appropriately reimbursed for the true clinical acuity and complexity of the members they already serve. And let’s be real, you should.

• The Data: A substantial body of clinical literature indicates that rates of undiagnosed dementia routinely exceed 60%, underscoring persistent gaps in routine clinical identification.
• Missed Revenue: When dementia goes undocumented, plans are reimbursed as if the member represents  a lower risk profile, despite the significantly higher medical costs typically associated with cognitive impairment.
• Screening & Diagnosis: Primary care workflows are not designed for longitudinal cognitive assessment, and time constraints limit routine screening. Families may delay evaluation due to fear, uncertainty, or stigma. While access to dementia-trained specialists is often limited, with wait times that can extend six to nine months.
• Recapture: On average, approximately 70% of diagnosed members are consistently recaptured year-over-year. Improving longitudinal documentation represents a meaningful opportunity already embedded within existing data.

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2. The MLR Play: Addressing Historically "Unmanageable" Utilization

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Dr. Mach’s presentation highlighted a material concentration of utilization: People living with dementia account for 27% of all MA inpatient admissions and 37% of all MA readmissions. These hospitalizations are rarely for "dementia" itself—they are for diabetes, CHF, COPD, falls, UTIs, dehydration-conditions that become significantly more difficult to manage when cognitive impairment is present. Engaging family caregivers to recognize early changes in condition plays a critical role in preventing escalation and avoidable utilization.

• Industry Consensus: In discussions with multiple Medicare Advantage plans, leaders consistently report that members with a dementia diagnosis often exhibit Medical Loss Ratios exceeding 100%.
• The Family Caregiver(s): Family caregivers are essential to effective cost management in dementia populations. When equipped with education, coaching, and tools, they are better positioned to manage day-to-day care needs and reduce the likelihood of avoidable hospitalizations.
• Why It Matters Now: Every avoided hospitalization directly improves MLR. In an environment where rate increases can no longer be relied upon to offset medical trends, sustained reduction in avoidable utilization among high-cost dementia populations becomes a critical margin lever. Programs that successfully reduce avoidable utilization in this population can meaningfully stabilize margins.

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3. Retention & Star Ratings: An Increasing Point of Differentiation

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As plans reassess ancillary benefits in response to financial pressure, facing potential member disruption and churn, this moment creates an opportunity for differentiated approaches to engagement and experience.

• Member Retention & Satisfaction: When members and their families experience consistent, high-touch engagement through programs that improves quality of life, plans are more likely to retain those members over time.
• Caregiver Loyalty: Providing practical tools and dedicated coaching to family caregivers - often an exhausted spouse or adult children, you can foster strong loyalty and trust. Programs that deliver this level of engagement consistently report high satisfaction and Net Promoter Scores (NPS).
• Star Ratings: Improved management of chronic conditions such as diabetes and hypertension among members living with dementia can positively influence HEDIS measures and medication adherence (Part D Stars), supporting the preservation of  Quality Bonus Payments over time.

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The Time to Act is Now. What Plans Should Expect.

The current margin environment represents a meaningful inflection point for Medicare Advantage plans. Solutions that address both revenue accuracy and avoidable utilization are increasingly central to performance discussions.

• Improve Revenue: By enabling earlier identification and more consistent documentation of cognitive impairment, plans can better align RAF with the true clinical acuity of their populations over time.
• Reduce MLR: By decreasing avoidable hospitalizations and emergency utilization among members living with dementia.
• Risk-Aligned Partnerships: Ceresti Health structures partnerships to align financial accountability with performance outcomes.

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Practical Steps for Plans:

• Analyze your claims to identify members with a dementia diagnosis, indicators of cognitive impairment, or persistently high utilization patterns.
• Evaluate proven partners with demonstrated experience in caregiver-enabled dementia care ahead of the 2027 rate year.
• Ultimately, improving outcomes for members and their families remains the shared objective—and dementia care represents one of the most consequential opportunities to do so at scale.

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The Imperative for Action

The window to address dementia as a material driver of cost, revenue accuracy, and member experience is already open—and it is narrowing quickly. Plans do not need to design a new benefit, file new products, or wait for future rate years to begin addressing this population.

What matters now is speed to execution. Leading plans are seeking proven partners that already have the infrastructure, clinical workflows, caregiver engagement model, and operating experience in place to deploy dementia care rapidly and at scale.

Dementia is not a population that can wait for long build cycles or incremental pilots. Every month of delay represents continued misalignment between risk, reimbursement, and utilization—at a time when margins leave little room for inefficiency.

For plans focused on stabilizing performance ahead of the 2027 rate environment, partnering with an experienced, caregiver-enabled dementia care organization offers a near-term path to impact—without the burden of standing up a program internally.

Ultimately, the opportunity is clear: act decisively, leverage what already works, and deliver better outcomes for members and their families—while protecting the financial sustainability of the plan.

My next article will get into CMMI programs that Medigap plans need to leverage. For more information on Ceresti’s validated outcomes, visit Ceresti.com or follow their updates on LinkedIn.‍