Medicare Advantage Exits Force 3 Million-Plus Seniors to Switch

A record wave of plan terminations

Medicare open enrollment began on October 15. For millions of older Americans, this year's enrollment period is a forced search for new coverage rather than a routine review. Private insurers are ending Medicare Advantage plans for 2027, and rural areas are hit hardest.21 By NPR's count, more than 40 states will lose at least some Medicare Advantage plans, and close to 200 mostly rural counties will be left with no Medicare Advantage option at all.25

The number of people affected depends on who is counting. Medicare Market Insights, an industry newsletter, puts it at about 3.16 million enrollees, or 11% of everyone in Medicare Advantage. That is up from 2.87 million a year earlier.23 CNN, citing the newsletter's founder, notes that the total has risen each year, from about 2 million for 2025 to 2.9 million for 2026 and nearly 3.2 million now.24 Figures reported by MarketWatch are higher, at 3.8 million enrollees pushed off their plans.28 NPR's reporters said they had seen estimates as high as 4 to 5 million, while cautioning that official numbers have not been released.25

The sources agree on the direction even where the totals differ. Every count shows more disruption than last year, and the increases are not small. This is the third straight year of turmoil in the program, as CNN describes it.24

NPR's headline says these people are "without coverage," and that needs a correction. Enrollees whose plans end and who don't choose a new one are moved automatically into traditional Medicare. They also get a special window through February 28, 2027 to pick a different Medicare Advantage plan.22 What they really lose is the extras that drew them to Medicare Advantage, such as dental, vision and hearing benefits, which traditional Medicare largely doesn't cover.25 That is a real loss, but it is a different one from becoming uninsured.

Who is pulling back, and where

The biggest insurers are leading the retreat. UnitedHealth confirmed that about 390,000 of its members are in plans being discontinued, and Humana has announced cuts affecting about 600,000 enrollees.22 KFF's county-level analysis shows UnitedHealth leaving 228 counties while entering only 9. Health Care Service Corporation is exiting 498 counties and entering none, and Centene is leaving 359.29 Some of the sharpest losses are regional. Blue Cross and Blue Shield of Minnesota's Aware Integrated is eliminating 90% of its plans, affecting 258,000 people.23 Eleven insurers, including Wellmark and several health-system-owned plans, are leaving the individual Medicare Advantage market completely.27

The losses are concentrated in particular places. In the Twin Cities, about a third of Medicare Advantage plans are closing, and in Dallas-Fort Worth, Houston and Seattle the share is more than a quarter.25

Counts of counties with no plans differ by method, but every version shows a sharp rise. Modern Healthcare, as cited by MarketWatch, reported 181 counties with no Medicare Advantage plans for 2027, up from 67.26 KFF counts 193 counties with no Medicare Advantage drug plan open to general enrollment, affecting 638,000 people, compared with 399,000 this year.24

The federal government describes the market very differently. CMS says the total number of plans will drop only from 5,553 to about 5,532. It also says more than 99% of beneficiaries will have at least one plan and 97% will have ten or more.27 CMS Administrator Mehmet Oz has said the agency is "slashing handouts to big insurance companies" while keeping premiums stable.28 Both descriptions can be accurate at once. The national plan count stays steady partly because insurers are adding special needs plans for people with chronic conditions, which have grown from 376 in 2025 to 744. Insurers receive higher federal payments for these sicker enrollees.24 As a result, the market is moving toward the patients who bring in more money while general-enrollment options shrink.

Why insurers are leaving

Insurers say their medical costs are rising faster than federal payments. UnitedHealthcare's Bobby Hunter cited "funding pressures, rising medical costs, rising drug costs, and increased utilization."29 CMS did finalize a 2.48% average payment increase for 2027, worth more than $13 billion. That was well above the 0.09% it proposed in January, but insurers say it still trails their costs.22 Critics answer that insurers have been overbilling for patient care.24

The insurers' financial pain looks real. In a Healthscape survey, more than 90% of Medicare Advantage market leaders said the business is currently unprofitable, and more than half said they had considered leaving it.28 Our reading is that this is a planned retreat to protect margins rather than a market collapse. Analysts have noted that the cuts could eventually improve earnings, while enrollees bear the cost through fewer choices and leaner benefits.26 Insurers expect enrollment to drop to about 34 million, roughly 47% of Medicare. CMS expects the actual number to be higher.24

Lower premiums, higher costs at the point of care

CMS projects the average Medicare Advantage premium will fall 16.5%, from $14.37 to $12 a month.27 That figure is misleading on its own. The average maximum out-of-pocket limit is rising about 9%, and dental allowances and Part B premium "givebacks" are shrinking.27 For drug coverage, the average deductible in plans that include it rises 23% to $509. Only 12% of enrollees are expected to be in plans with no deductible, down from 60% in 2024.24 The Better Medicare Alliance, which supports the program, put it this way: premiums fell, but many seniors "will pay more when they need care."24

Standalone drug plans are also unsettled. More than 1 million people are losing their Part D plans, Aetna is leaving about half of states, and no Part D plans with a $0 premium will be offered.24

Drug prices: real cuts, smaller savings for patients

Medicare's negotiated drug prices are the clearest good news. Starting January 1, 2027, negotiated prices apply to 15 more drugs. Ozempic, Rybelsus and Wegovy will cost $274 for a 30-day supply, down from a $959 list price.9 Across the 15 drugs, the cuts range from about 38% to 85%.9

The sources disagree on what the savings add up to. CMS projects about $12 billion in savings for taxpayers but only $685 million in lower out-of-pocket costs for enrollees.7 An analysis in a pharmacy journal found the negotiated prices were a median 38% below estimated U.S. net prices. Even so, they remained a median 108% above prices in peer countries.5 Some observers also question how much negotiation matters to individual patients now that out-of-pocket drug spending is capped at $2,400 for 2027.4 Our reading is that negotiation is lowering Medicare's spending more than it is lowering what patients pay at the pharmacy. Meanwhile, rising plan deductibles take back some of what patients save.

Workers and Medicaid enrollees face the same pressures

The Medicare changes are part of a wider cost squeeze. Mercer's preliminary survey of more than 1,800 employers projects an 8.2% rise in health benefit costs per worker for 2027. That would be the biggest increase since 2003, and it already accounts for planned cuts. Without those cuts, the increase would be about 11%.37 Other forecasts run from 8.2% to 11.1%, mainly because some measure costs before employers shift part of them to workers and some measure after.36 About two-thirds of large employers expect to raise the share of premiums workers pay.39 GLP-1 drugs account for about one percentage point of the increase.34

Medicaid faces larger coverage losses. Under the 2025 reconciliation law, work requirements start nationally on January 1, 2027. Most expansion adults will have to show 80 hours a month of work, school or volunteering, or earn at least $580 a month.14 Nebraska started early, and the results are a warning. Of 533 people denied at renewal in July and August, 490 were denied for failing to provide paperwork, and only 43 for failing the requirement itself.13 The Urban Institute projects that 4.6 to 5.2 million expansion enrollees could lose coverage, even though more than 90% of them work, go to school, care for family or would qualify for an exemption.11

Hospitals are where these pressures meet

Rural hospitals sit where all of these changes come together. The American Hospital Association reports that more than 40% of rural hospitals lose money.42 Medicare and Medicaid cover about 72% of rural hospital discharges, and both pay less than the cost of care.43 The AHA estimates the law will raise rural hospitals' uncompensated care costs by nearly $20 billion and put more than 300 at risk of closing, converting or cutting services.41 FactCheck.org notes that the law's $50 billion rural health fund is much smaller than the Medicaid cuts. It also notes that, for the most part, the fund cannot be used to cover uncompensated care.48 Other providers warn that when people lose coverage, hospitals raise prices to make up the losses, and everyone else pays more.49

The Medicare Advantage exits are the most visible part of a broader shift. Insurers, employers and governments are all passing more health care costs on to patients. Seniors are paying more when they need care, workers are paying more out of their paychecks, and low-income adults are losing coverage. Rural hospitals absorb the cost of all three. It is also happening during a midterm campaign in which health care costs are a central issue.24 Anyone enrolled in Medicare Advantage should read their mail and compare plans before the December 7 deadline. Each state has a free SHIP counseling hotline.25