Medicare Advantage Health Plans: Is OBBBA an Opportunity? 

By Michael LeVangie, Senior Vice President, U.S. Consulting Practice

A New Era for Medicare Advantage 

The One Big Beautiful Bill Act (OBBBA) is reshaping the healthcare landscape and, with it, Medicare Advantage (MA). While the legislation introduces considerable financial and operational pressures, it also opens a window for healthcare entities to transform. 

For health plans willing to adapt, OBBBA can serve as a catalyst to modernize infrastructure, strengthen partnerships, and improve member outcomes. The key is viewing compliance not as a burden, but as a springboard for innovation. 

Understanding the OBBBA Impact 

OBBBA is a sweeping budget and tax measure with far-reaching implications for Medicare and Medicaid. According to PwC, the law will “dramatically reshape the health industry,” with the Congressional Budget Office projecting $1 trillion in reduced federal healthcare spending between 2025 and 2034. 

The changes will reverberate across the payer and provider ecosystem: 

• Medicare funding pressure: Cuts triggered by the Statutory Pay-As-You-Go Act could reduce Medicare spending by $490 billion from 2027 through 2034 — forcing MA plans to rethink benefit design, provider negotiations, and pricing models. 

• Provider network instability: A CFO of a large physician practice recently told KLAS, “If state and federal people do things that are going to hurt us and make us lose a lot of money, we will cancel our Medicare Advantage contracts.” Shrinking reimbursement could cause some providers to exit networks altogether, threatening access and member satisfaction. 

• Eligibility shifts: New restrictions on certain non-citizens, refugees, and asylees who have paid into the program will narrow the potential MA enrollee base — altering risk pools and revenue projections. 

• Operational risk management: MA plans will need tighter collaboration with providers to ensure accurate documentation and risk adjustment. Incomplete or inaccurate coding could result in underfunded populations and missed opportunities to reflect true member health status. 

• Impact on low-income populations: The repeal of two rules designed to ease access to Medicare Savings Programs (MSPs) will likely limit assistance for vulnerable members, increasing disparities in care and cost burden. 

While these shifts introduce new challenges, they also underscore the need for data-driven, technology-enabled agility — the kind that enables health plans to respond in real-time to evolving regulations, reimbursement, and member expectations. 

Turning Compliance into Capability 

Forward-thinking MA organizations are already reframing OBBBA from a compliance exercise into a transformation roadmap. Those who invest now in scalable, intelligent systems will be best positioned to balance cost, compliance, and care delivery. 

Key enablers include: 

• Modern Data Infrastructure: Breaking down silos and integrating clinical, financial, and operational data to enable real-time risk scoring, regulatory reporting, and strategic forecasting. 

• AI-Driven Automation: Leveraging predictive analytics and workflow automation to streamline claims, improve documentation accuracy, and strengthen audit readiness. 

• Agentic AI and Digital Engagement: Combining advanced digital engagement tools — member portals, chatbots, texting, and app-based communication — with empathetic human agents to enhance member experience and retention. 

The combination of technology and human expertise allows MA plans to operate with greater precision, transparency, and efficiency. It’s not only about satisfying OBBBA requirements, but outperforming peers who treat the bill purely as an administrative challenge. 

The Opportunity Ahead 

Change is inevitable, but how organizations respond defines their success. OBBBA is not just a legislative hurdle; it’s a moment for payers to evolve into more resilient, data-driven enterprises. 

By accelerating investment in intelligent automation, actionable analytics, and AI-powered workflows, MA plans can achieve: 

• Operational efficiency through faster, more accurate processes 

• Regulatory agility to stay compliant amid ongoing change 

• Improved member care through better insights and engagement 

In the end, OBBBA may compress margins, but it can also expand capabilities. The health plans that act now will not only survive the disruption but set the standard for how innovation and compliance coexist in the Medicare Advantage era. 

In healthcare’s next chapter, compliance isn’t the finish line — it’s the starting point for innovation.