Medicare Advantage Cuts: Humana, UnitedHealthcare Drop 990,000

What happened

The two biggest private insurers in Medicare are discontinuing plans that together cover close to a million older Americans. Humana and UnitedHealthcare both confirmed they will stop offering certain Medicare Advantage plans starting next year. The change affects about 1 million people aged 65 and older. Healthcare Brew reported it first.1 Humana said it has already told investors that its 2027 plan exits will hit about 600,000 members. UnitedHealthcare said it is closing plans that cover about 390,000 people.1 That adds up to roughly 990,000 enrollees.14

Humana's share was not a surprise. Chief Financial Officer Celeste Mellet gave the 600,000 figure on a July earnings call, which is about 8% of the company's nearly 7.2 million Medicare Advantage members.12 UnitedHealthcare dated its non-renewal notices October 2. Members can choose another Medicare Advantage plan for coverage starting January 1, 2027. Anyone who does nothing goes back to Original Medicare by default.5

The timing makes things harder for those members. Medicare's annual open enrollment runs from October 15 to December 7, and the discontinued plans end December 31.14 People in those plans also get a Special Election Period that runs through February 28, 2027.7

"Losing coverage" or being moved to a new plan?

News outlets have described this in very different ways. Some headlines said about a million older Americans "could soon lose their health insurance."4 That overstates what is happening. Newsweek pointed out that people whose plans end do not lose Medicare. If they don't pick a new private plan, the rules send them back to Original Medicare.14 Both insurers say most affected members will be offered another plan from the same company.14

Still, the reassuring version leaves things out. Cleveland.com, citing Fortune, reported that replacement plans usually cost more and offer fewer benefits.6 The two companies also plan to keep fewer of these members than their statements suggest. Humana has said it hopes to move about 40% of affected customers into other Humana plans.11 That leaves most of the 600,000 to find coverage on their own. Seniors who drift back to Original Medicare without planning take on real risk. It has no annual out-of-pocket cap and no built-in drug coverage, and it doesn't include the dental, vision and hearing benefits found in most Advantage plans.7 Waiting to sign up for Part D brings a permanent late-enrollment penalty of 1% for each month without creditable coverage.7

The fairest way to describe it: no one is losing their Medicare entitlement, but hundreds of thousands of people will probably end up with coverage that costs more, offers less, or both.

Profit motive or cost squeeze?

The coverage also disagrees about why this is happening. UnitedHealthcare blames higher costs and more use of care, and says the whole industry faces the same pressures.1 UnitedHealthcare President Bobby Hunter pointed to funding pressure, rising medical and drug costs, and higher utilization.2 NewsNation and Cleveland.com, both citing Fortune, framed the exits more bluntly as a way to protect corporate profits.36

Both explanations hold up, and the data shows how they fit together. High Medicare Advantage use and costs caught UnitedHealth off guard and drove its stock down in 2025. The company has since shrunk its Medicare Advantage membership to 7.6 million at the end of the third quarter.12 Mellet said Humana took a "targeted" approach, dropping low-return plans and keeping high-return ones.12 Coverage of Humana also says it is exiting plans rated below 3.5 stars. That matters because CMS pays higher benchmark rates to plans rated 4 stars and up.7

The type of plan being cut also says a lot. UnitedHealthcare's cuts focus on PPO plans. It is keeping HMOs and special needs plans, which have been its priority for years.12 PPOs let members see out-of-network doctors and cost more to run.2 Special needs plans, by contrast, get higher government subsidies.3 The number of special needs plans is expected to grow about 9% in 2027, even as other Medicare Advantage offerings shrink.11 The pattern is clear: insurers are keeping the plans that make money and dropping the ones that don't.

A wider retreat

Humana and UnitedHealthcare get the headlines, but the pullback goes well beyond them. UnitedHealth is leaving 228 counties and entering only 9. Humana is leaving 62 and entering 4. Centene is exiting 359. Health Care Service Corporation is exiting 498 counties and entering none, according to KFF data.20 At least 11 insurers that sold individual Medicare Advantage plans this year are leaving that market for 2027, up from seven that left for 2026.19

Estimates of the total disruption vary. A Modern Healthcare analysis found that at least 3.8 million enrollees will have to shop for new 2027 coverage, and that 181 counties will have no Medicare Advantage plans, up from 67.19 Separate reporting citing NPR put the number of counties with no options at 193. Another estimate counted at least 2 million seniors affected by plan closures.13 ABC News, citing KFF, used the 193 figure for counties with no Medicare Advantage prescription drug plan.17 The differences probably come from what each analysis counts. Either way, the trend points the same direction.

On the other side, CMS calls the 2027 market "stable."12 It projects the average Medicare Advantage premium will fall from $14.37 to $12 a month. It also says more than 99% of beneficiaries will have at least one plan available and 97% will have at least ten.14 Total plan counts barely change, from 5,553 to about 5,532.11 Insurers expect enrollment to fall 6% to about 34 million. CMS says that projection is overblown.15

The two pictures can both be true, because premiums are only part of the cost. Healthcare Dive reported a Leerink Partners analysis showing UnitedHealthcare's dental cuts affect almost 70% of its members.15 Humana cut or eliminated Part B premium givebacks for about 62% of its members, although it kept primary care copays the same and slightly raised dental allowances.9 Another analysis found the average maximum out-of-pocket limit is rising about 9%.11 Low premiums mean less when the benefits behind them are getting thinner.

The pressure continues even after a better-than-expected payment year. CMS finalized a 2.48% average rate increase for 2027, worth more than $13 billion and well above the nearly flat 0.09% proposed in January. Insurers still say reimbursement hasn't kept up with medical costs.2

Drug prices: real savings, higher caps

Prescription drugs bring mixed news for 2027. Negotiated prices for 15 more drugs take effect January 1, including Ozempic, Wegovy and Rybelsus. Semaglutide falls to $274 for a 30-day supply, down from a 2024 list price of $959.23 CMS estimates enrollees will save about $685 million out of pocket under the standard benefit.23

The Part D out-of-pocket cap is going up, though, from $2,100 to $2,400, and the maximum deductible rises from $615 to $700.24 Medicare got those figures by applying a 13.65% increase that reflects fast-rising per-person drug costs.28 The temporary Part D premium subsidy is also ending.29 TheStreet calculated that a retiree collecting $1,500 a month could lose up to 46% of next year's cost-of-living raise to higher drug costs alone.30 Seniors pushed out of Advantage plans who have to buy standalone Part D coverage will feel all of these changes together.

Medicaid, hospitals and the cost spillover

The Medicare changes come at the same time as an even bigger change in Medicaid. Starting January 1, 2027, expansion adults aged 19 to 64 must show 80 hours a month of work, school, training or volunteering, or earn at least $580 a month. Coverage is at stake in 43 states and Washington, D.C.33 The Congressional Budget Office estimated the rule would cut federal Medicaid spending by $326 billion over ten years and leave 4.8 million more people uninsured in 2034.33 A New England Journal of Medicine Perspective warned that safety-net and rural hospitals could take on more uncompensated care.32 The Urban Institute projects $278 billion in uncompensated care by 2034 under the law.34

That matters to people who never touch Medicaid. A New Hampshire policy analyst noted that unpaid hospital bills can end up being passed on to privately insured patients through higher premiums.37 Those premiums are already high. KFF's 2026 employer survey put the average family premium at $28,303, up 5%. Workers' share rose 9% to $7,471, while wages grew 3.7%.42 Rising inpatient hospital bills and spending on GLP-1 drugs were among the main pressures.47

The bottom line

Taken together, this looks like a coordinated retreat across the system, not one company's business decision. Private Medicare insurers are dropping members with costly plans, and Medicaid is cutting coverage through paperwork. Those costs don't go away. They shift to seniors through higher cost-sharing, to hospitals through unpaid bills, and to workers and employers through premiums. Watch two things over the next few years: how many of the roughly 990,000 displaced seniors end up in Original Medicare without a Medigap policy or drug plan, and how hospital finances hold up once the Medicaid rules take effect.