Medicare Advantage Exits Hit 990,000 UnitedHealth, Humana Members

A retreat that federal payments did not stop

The two largest Medicare Advantage insurers are shrinking going into the 2027 plan year. UnitedHealthcare and Humana are ending plans that together cover about 990,000 people. UnitedHealth spokesperson Eric Hausman confirmed that roughly 390,000 UnitedHealthcare members are affected, and Humana's chief financial officer, Celeste Mellet, said about 600,000 Humana enrollees are in plans that will close.1314 The Humana figure is about 8% of the company's roughly 7.2 million Medicare Advantage members.13 Wall Street analysts going through new government data found that CVS Health's Aetna and Centene are also scaling back their Medicare Advantage footprints, so the pullback reaches beyond these two companies.11

The timing is the striking part. In April, the Centers for Medicare & Medicaid Services (CMS) finalized a 2.48% average payment increase for 2027, worth more than $13 billion, after proposing a nearly flat 0.09% in January.3 Once expected risk-score growth is included, the increase comes to about 4.98%, or roughly $26 billion.1 Insurer stocks rose between 8% and 14% in after-hours trading on the news.7 Six months later, the same companies are still cutting plans. Insurers did not get less money for 2027. The cuts show that the industry's spending on care, and its profit targets, are growing faster than even a better-than-expected rate increase.

Where the reporting agrees, and where it differs

Across outlets, the basic numbers match: about 390,000 UnitedHealthcare members, about 600,000 at Humana, and close to 1 million in total.121416 The details are less consistent. Bloomberg, cited by Quartz and Yahoo Finance, described the exits as a departure from less profitable markets that covered more than one million seniors.11 Later Quartz coverage based on CBS News reported that UnitedHealthcare is closing a single plan with about 390,000 members.18 Other accounts describe several discontinued plans, mostly preferred provider organization (PPO) products.1619 UnitedHealthcare President Bobby Hunter said on the company's third-quarter call that the 2027 cuts focused on PPOs, continuing a long-running shift toward HMOs and special needs plans.13 PPOs let members see doctors outside the network, and that flexibility costs insurers more to run.11 Given that executive explanation, "plans" is likely the more accurate description of what is going on.

The outlook for Humana's affected members also depends on which account you read. In statements to reporters, Humana said most members whose plans change will still have another Humana Medicare Advantage option.14 On the July earnings call, though, the company said it expected to keep only about 40% of the 600,000 by moving them into other plans, which would leave about 240,000 people looking for new coverage.20 These figures measure different things: having an option is not the same as staying. Still, the company's own forecast is less reassuring than its public statements. Humana said it removed what Mellet called the "lower tail" of returns rather than cutting evenly across the board, and coverage has linked the cuts to plans rated 3.5 stars or lower.2014

The official picture versus the member experience

CMS calls the 2027 market stable. It projects that the weighted average monthly Medicare Advantage premium will drop from $14.37 to $12, that more than 99% of beneficiaries will have at least one plan available, and that 97% will have at least 10.19 CMS Administrator Mehmet Oz presented the outlook as the agency fighting to keep coverage affordable.14

The details of the plans point the other way. A Leerink Partners review of the Medicare Plan Finder found that many large carriers cut dental benefits and raised cost-sharing for 2027, while mostly keeping primary-care copays flat.13 Industry analysts say $0-premium plans, long the main way to compete in many regions, are disappearing or offering thinner benefits.13 Of UnitedHealthcare, Humana, Centene and Clover Health, Humana was the only one that did not cut dental coverage.16 A KFF analysis found that 193 counties will have no general-enrollment Medicare Advantage plan with drug coverage in 2027, up from 123 this year. KFF also found that UnitedHealth is leaving 228 counties and entering nine, while Humana is leaving 62 and entering four.15 Humana expects to cover just over 80% of U.S. counties, down from 85%.11 Government projections put 2027 enrollment at about 34 million, around 6% below current levels.11

A falling average premium can sit alongside higher costs for members. The premium is only one charge. Deductibles, copays, network limits and dropped extras such as dental care are where costs are moving. A low premium on a plan with a narrower network and higher hospital cost-sharing can cost a sick member more over a year than last year's plan did.

Why the insurers say they are pulling back

The insurers' explanation is consistent. UnitedHealthcare's Hunter pointed to funding pressure, rising medical and drug costs, and higher use of care across the health system.19 UnitedHealth was caught off guard by high utilization in 2025, its stock fell, and it reported 7.6 million Medicare Advantage members at the end of the third quarter.13 Benefit advisers say the increase in use comes mainly from more physician and outpatient visits and from prescription drugs.6

Critics see it differently. MedPAC, the panel that advises Congress on Medicare, estimates that Medicare Advantage payments in 2026 will be about $76 billion, or 14%, higher than traditional Medicare would spend on the same beneficiaries.4 Consumer advocates said CMS gave in to industry lobbying by raising the final rate and dropping a planned update to its risk-adjustment model.410 That decision alone made a difference of about 2.2 percentage points in the payment rate.5 Georgetown researchers found that final rates have come in an average of 1.26 points above the January proposals since 2016, and called the upward revision built into the process.1 Both views can be partly true: plans can be paid more than traditional Medicare and still pull out of markets that miss their profit goals. That is how the companies themselves describe their cuts, as targeted pruning of weak products and not a response to losing money overall.13

Drug coverage: lower prices, higher limits

Members whose plans end and who do nothing are returned to Original Medicare on January 1. That program does not automatically include outpatient drug coverage, so they would need a separate Part D plan.14 One elder-law attorney noted that defaulting to Original Medicare can leave a person with no drug coverage, no Medigap policy, no cap on out-of-pocket costs, and the risk of a late-enrollment penalty for Part D.20 UnitedHealthcare's notices say affected members can choose a new plan between October 15 and December 31, and those who go back to Original Medicare get a special enrollment period through February 28, 2027.11

Drug costs are changing in both directions. Negotiated prices for a second group of 15 Part D drugs take effect January 1, including Ozempic, Wegovy and Rybelsus, and CMS estimates enrollees will save about $685 million in out-of-pocket costs.32 Semaglutide's negotiated price is $274 for a 30-day supply, compared with an estimated net price of $428 before negotiation.37 At the same time, the Part D out-of-pocket cap goes up from $2,100 to $2,400, the maximum deductible goes up from $615 to $700, and the average standalone Part D premium is projected to rise slightly to about $36 a month.32 CMS has also said the redesigned Part D benefit could push plans toward tighter utilization management, narrower formularies and restricted pharmacy networks.5

Medicaid cuts add to hospitals' strain

The Medicare Advantage pullback is happening as Medicaid shrinks. States must start work requirements by January 1, 2027, and the Congressional Budget Office estimates that 4.8 million of the 11.8 million people expected to lose Medicaid under the 2025 budget law will lose it because of the work rules.22 Robert Wood Johnson Foundation modeling projects that 4.9 million to 10.1 million people could lose coverage in 2028 from work requirements and more frequent eligibility checks combined, and that many of them will already be working.28

Hospitals feel this directly. A Commonwealth Fund analysis projected that work requirements could cut operating margins by about 12% to 13% at hospitals in Medicaid expansion states, and by about 26% to 30% at safety-net hospitals, as uncompensated care increases.21 Connecticut hospital officials expect to lose hundreds of millions of dollars and warn of service cuts.2426

The combined effect is that, in 2027, more older patients will be in narrower networks with higher cost-sharing, while more working-age adults will have no coverage at all. Hospitals, especially rural and safety-net facilities, will get less predictable revenue from both groups. The 2.48% rate increase was presented as a win for stability. For the nearly one million members whose plans are ending, stability will depend on comparing plans carefully before December 31.