Medicare Advantage Exits Force 320,000 Minnesotans to Shop

A second straight year of upheaval

For the second fall in a row, a large share of Minnesota's older residents are opening letters that say their health plan will be gone on January 1. More than 320,000 Minnesotans have to find new coverage because about a dozen Medicare Advantage plans sold in the state will end after 2026.12 The Minnesota Board on Aging puts the number higher, at roughly 390,000, or about a third of the state's seniors. Its count includes people losing stand-alone Part D drug plans as well as Medicare Advantage coverage.1318 The two figures measure different things and don't actually conflict. Both describe the largest shakeup in the state since UCare's exit in 2025, which pushed about 160,000 seniors into new plans.13

Every major carrier is involved. Blue Cross and Blue Shield of Minnesota, by far the state's largest seller of private Medicare plans, is dropping all but one of its current Advantage options and replacing them with a shorter list of new ones.12 Its termination letters go to about 250,000 people.12 Medica is pulling Medicare Advantage from 22 counties and leaving about 27,400 members to shop. HealthPartners is ending three plans and leaving seven counties, which affects about 24,500 people.12 UnitedHealthcare is shrinking its service area by a dozen counties, affecting 14,500 people. Humana is leaving the individual market in Minnesota entirely, which affects about 9,500 enrollees, though it will keep serving employer groups.12

The stakes are large because Medicare Advantage is a big part of Medicare in Minnesota. About 1.2 million Minnesotans have Medicare, and nearly half are in Advantage plans.12 Overall plan options in the state are expected to fall by about 22%, from roughly 68 plans to 53.13

Restructuring, not retreat, by the insurers' account

Blue Cross rejects the word "exit." The company says it is restructuring and that more than 80% of its current Advantage members will have a new Blue Cross plan available in 2027.1114 Medicare rules required it to cancel the existing plans before launching new ones, according to the insurer.11 CEO Dana Erickson has said the company lost more than $500 million on Medicare over three years. She called that trend unsustainable, while adding that the company's finances remain strong.17

The insurers all give much the same reason: medical and drug spending is outrunning what they are paid. Medica pointed to sharply higher medical and prescription costs and to members using more care than in past years.12 HealthPartners said it cut back so it could keep offering affordable options later.12 Blue Cross pointed to a national pattern in which nearly 5 million seniors have had an Advantage plan discontinued over the past two years.11

The "80%" figure deserves a careful look. Blue Cross will stop selling Advantage plans altogether in 31 counties, including areas around Brainerd and Rochester. In Hennepin County, the state's most populous, about 53,000 enrollees will have just one new Blue Cross plan with drug coverage to choose from.12 A replacement plan existing somewhere in the portfolio is not the same as having a comparable, affordable option close to home.

Where the market is simply gone

The effect is clearest in rural and regional Minnesota. Daren Wysocki, a 68-year-old retired forester who lives near Deerwood, looked up his Crow Wing County ZIP code on Medicare.gov and found no Medicare Advantage plans at all for 2027.17 About a quarter of the county's roughly 70,000 residents are 65 or older. Wysocki worries that many neighbors will be left without guidance.17

Olmsted County, home to Mayo Clinic, is also hard hit. It goes from three Advantage insurers in 2026 to one in 2027: Medica, with two plans that include drug coverage.19 In counties where Blue Cross is pulling out, its customers can still buy Medicare supplement and stand-alone drug coverage paired with traditional Medicare. That combination typically costs much more each month.1219

Minnesota offers a few protections that other states lack. The state does not use the national lettered Medigap plans. It offers a Basic and an Extended Basic plan with optional riders, and it uses community rating, so an 85-year-old pays the same base premium as a 65-year-old.13 People whose plans are ending can buy Medigap coverage without medical underwriting, and a new state law gives some people aged 65 to 70 more chances to switch.1913 Those whose plans are not renewing also get a special enrollment period that runs from December 8 through the end of February, on top of the regular October 15 to December 7 window.13

Getting help may be the hard part. Last year the state's free counseling line answered only about 48% of calls, and callers waited an average of 34 minutes, according to the Board on Aging.13 Brokers and counselors are expecting record call volumes this season.15

Lower premiums, higher bills

The national picture from the Centers for Medicare & Medicaid Services looks calm. The agency projects that the average Medicare Advantage premium will fall 16.5%, from $14.37 to $12.00 a month. It says 97% of beneficiaries will have 10 or more plan choices, and the national plan count barely changes, from 5,553 to about 5,532.29 CMS Administrator Mehmet Oz presented the stable premiums as the result of cutting what he called handouts to insurers.29

Minnesota's experience suggests those averages hide a lot. Premiums may drop, but a Star Tribune analysis of federal data found that the 2027 Minnesota plans will generally cost seniors more when they actually use care.12 The new plans' out-of-pocket requirements are so much higher that many people will not be automatically moved into them, which is unusual.12 Advocates expect higher copays, higher out-of-pocket limits and thinner dental, vision and hearing benefits. Collections-industry observers warn this could add to billing disputes and medical debt.18 KFF's Juliette Cubanski made a related point nationally: premium data alone doesn't show whether plans are dropping drugs, raising copays or switching to coinsurance, and those choices can matter more than the premium.24

My reading is that Minnesota is not an outlier from the national trend. It shows early, and in sharper form, a market where insurers protect their headline premiums by shifting costs to the people who get sick.

Drug prices pull in both directions

Prescription drug costs are central to this story in two ways. Insurers blame drug spending for their losses, while the federal changes coming in 2027 cut both ways for patients. Negotiated Medicare prices start January 1 for 15 drugs, including Ozempic, Wegovy and Rybelsus. CMS estimates the change will save $685 million in 2027.21 At the same time, the Part D out-of-pocket cap rises from $2,100 to $2,400, and the standard deductible goes from $615 to $700.2528

The temporary federal subsidy that held down stand-alone Part D premiums is also ending early. It paid $9.8 billion to plans over 2025 and 2026.24 CMS says the average stand-alone premium will rise by less than $1, to $36. KFF's analysis is less upbeat. It finds the number of stand-alone plans falling about 13%, and no $0-premium stand-alone plans for people outside the Extra Help program. That means higher premiums for the 28% of such enrollees who paid nothing in 2026.24 Each side has data behind its claim. For people in Minnesota who are moving from Advantage back to traditional Medicare, the KFF numbers are the ones that will hit their budgets.

Medicaid and hospitals add pressure

The Medicare upheaval is happening alongside a squeeze on Minnesota's safety net. Under the 2025 federal budget law, federal Medicaid spending falls by an estimated $911 billion over 10 years. State officials estimate that as many as 140,000 Minnesotans could eventually lose Medical Assistance coverage.5 Work-reporting requirements and six-month renewals for many adults begin January 1, 2027. Some noncitizen adults lost federally funded coverage on October 1.5

Separately, CMS has frozen more than $550 million in Minnesota Medicaid funds since February as part of a fraud crackdown. State officials warn they may have to claw that money back from doctors and hospitals.410 Minnesota's interim human services commissioner said the disputed claims may reflect paperwork mistakes rather than fraud.3

Hospitals feel all of this at once. CHI St. Joseph's in Park Rapids expects $1.5 million to $2 million less in reimbursement each year.1 Winona Health's CEO said Medicaid pays roughly 68 cents for every dollar a service costs.5 Health systems are also merging, as HealthPartners and Essentia plan to combine. The state's top health economist told lawmakers that mergers often raise patient prices, by as much as 20% in some cases.8 Researchers warn that limits on Medicaid payments could lead providers to charge commercial insurers more, which would push costs onto everyone else.9

What it adds up to

These pieces are not separate problems. When insurers cut Advantage plans, seniors face more cost-sharing. Medicaid cuts mean more uninsured patients at already struggling rural hospitals, and hospitals respond by merging and raising prices. Nearly a quarter of Minnesotans already report delaying or skipping care because of cost.2 Federal officials say the market is stable, and nationally that may be true. In Crow Wing County, Olmsted County and dozens of other places, Minnesota seniors have until December 7 to work out what has changed for them.