Medicare Advantage Exits Push Over 3 Million Into New 2027 Plans

A third straight year of forced switching

Medicare open enrollment for 2027 coverage began on October 15 and closes on December 7. For millions of people, reviewing their plan is not optional this year, because the plan they have now will no longer exist.12 Medicare Market Insights founder Jared Strock estimates that nearly 3.2 million Medicare Advantage enrollees, close to 11% of the program, need to pick new coverage because their insurers are discontinuing their plans.12 That compares with about 2.9 million people whose plans ended for 2026 and 2 million for 2025.12 Before this run of disruption, only about 1% to 2% of enrollees lost their plans in a typical year.18

Estimates of the total vary with how they are counted. A Modern Healthcare review of federal data puts the figure at a minimum of 3.8 million, including roughly 512,000 people in 14 states whose insurers are leaving their area entirely.13 Some analysts tracking every plan say the number could reach about five million because cancellations are at a record level.2016 The figures don't conflict so much as measure different things: canceled plans, county withdrawals, and full exits from the market. All of them point the same way. This is the third straight year of heavy churn, and it is bigger than either of the two before it.

Who is pulling back, and where

The largest carriers account for most of the cuts. UnitedHealth has confirmed that about 390,000 of its members are in plans being discontinued, and Humana's cuts reach about 600,000 enrollees.15 Together the two companies cover 46% of the Advantage market.20 Humana's coverage will shrink from 85% of U.S. counties to just over 80%.15 It says it hopes to keep about 40% of affected members by moving them into other Humana plans.14

Counted by county, the retreat is wider still. UnitedHealthcare is leaving individual Advantage coverage in about 140 counties, Aetna in about 123, Elevance in about 56, and Centene in roughly 344, which is close to a fifth of Centene's footprint.14 KFF found that Health Care Service Corporation is exiting 498 counties and entering none.17 Eleven insurers, most of them owned by health systems, are leaving the individual Advantage market completely. They include Providence Health Plan, Molina, Presbyterian, and Memorial Hermann.1314

Rural residents are hit hardest. Modern Healthcare counts 181 counties with no Medicare Advantage plan at all for 2027, up from 67 this year.13 A separate count puts the figure at about 638,000 people in 193 counties, up from 399,000 people in 123 counties.18 Oliver Wyman's Haitham Aly notes that rural residents are the most likely to see insurers leave, while the Southeast generally keeps more choices.12

Why the federal numbers look calm

The Centers for Medicare & Medicaid Services (CMS) describes the market as stable, and its headline figure supports that: 5,532 Advantage plans next year, only 21 fewer than in 2026.1214 KFF adds that most people losing a plan live in counties with plenty of other Advantage options, plus traditional Medicare.17

The total plan count is misleading, though, because the mix of plans is changing. Insurers are adding special needs plans (SNPs) aimed at people with chronic conditions or people who qualify for both Medicare and Medicaid, because federal payments are higher for sicker enrollees.12 Strock counts 744 chronic-condition plans for 2027, up from 376 in 2025.18 SNPs overall are expected to grow about 9%.14

The broad plans most seniors actually buy are shrinking. The average beneficiary will have 28 Advantage plans with drug coverage to choose from, down from a peak of 36 in 2024.12 Many of the canceled plans are PPOs, which offer the most flexibility and include out-of-network coverage.12 In practice, a stable total hides a shift away from flexible general-market plans toward narrower ones aimed at specific groups.

The money behind the retreat

The sources agree on why insurers are pulling back: medical costs are rising faster than federal payments.12 CMS finalized an average 2.48% payment increase for 2027, worth more than $13 billion. That was far better than the nearly flat 0.09% proposed in January, but insurers say it still trails their costs.15 One industry survey found that over 90% of leading Advantage insurers say the business is not profitable right now.19

There is a competing view. Critics argue that insurers overbill for patient care, which would mean the program's money problems come partly from how insurers code and are paid, not only from underfunding.12 Both views can be partly true, but the insurers' behavior is the clearest evidence of their priorities. They are giving up enrollment to protect margins: insurers project Advantage enrollment will fall to about 34 million, or 47.4% of Medicare, in 2027. CMS expects actual enrollment to come in higher.12

Higher costs even for those who stay

Keeping a plan does not mean keeping the same terms. Nearly three-quarters of enrollees will pay more for prescriptions, and the average deductible for plans with drug coverage is rising 23% to $509.12 Only 12% of enrollees will be in plans with no drug deductible, down from 60% in 2024.12 Extra benefits such as dental, hearing, transportation, and over-the-counter allowances are expected to shrink.12 Median in-network out-of-pocket maximums are expected to rise to about $7,100.16

Standalone drug coverage is changing too. More than 1 million people are losing their Part D plans, Aetna is leaving that market, and no $0-premium Part D plans will be offered.12 CMS says the average Part D premium will rise by less than $1 to about $36 a month, but some insurers are raising premiums by more than $50.12

For people whose plans are canceled, the most important dates are about protections. UnitedHealthcare says affected members who don't pick a new plan will be moved to original Medicare and can choose a new Advantage plan through February 28, 2027.15 Guaranteed-issue rights can let people buy Medigap supplemental coverage without medical underwriting, but only for a limited window around the end of the old coverage.16 One safeguard from 2026 is gone: CMS will no longer let members switch plans if they chose based on inaccurate provider listings in the Plan Finder tool.20

Employers face the steepest rise in decades

The Medicare changes are part of wider cost pressure across the health system. Mercer's preliminary survey of more than 1,800 employers projects that health benefit costs per employee will rise 8.2% in 2027, the most since 2003, even after planned cuts. Without those cuts, the increase would be about 11%.25 Other forecasts are higher: 9.5% from Aon, a 9.2% median from Business Group on Health, and an 11.1% underlying trend from WTW. PwC's 9% projection is the highest in 17 years.1

Most of the gap between these forecasts comes from one choice: whether the figure is measured before or after employers shift costs to workers.6 Mercer found that 59% of employers plan cost-cutting changes such as higher deductibles. About two-thirds of employers with 500 or more workers expect to raise employees' share of premiums.39 The cost drivers named most often are cancer care, GLP-1 weight-loss drugs (about one percentage point of the increase), AI-assisted billing that codes care more intensively, and arbitration under the No Surprises Act.18 Among small employers, 73% say they are considering dropping traditional health benefits in 2027.8

Medicaid cuts and hospital bills

At the same time, the Medicaid changes in the 2025 budget law, known as H.R. 1, take effect on January 1. About 20 million adults in expansion states will have to document 80 hours a month of work, school, or volunteering, or earnings of $580 a month, and they will have to re-verify eligibility every six months.21 Retroactive coverage drops to one month for expansion adults and two months for most others.27 Twenty-five states and the District of Columbia are suing over how CMS defined the "medical frailty" exemption.29

Arkansas offers the clearest precedent. When it tried work requirements in 2018, more than 95% of people subject to the rule already met it or qualified for an exemption. Even so, 18,000 lost coverage, and employment did not rise.23 The Urban Institute projects H.R. 1 will produce $278 billion in uncompensated hospital care by 2034.21

Those unpaid bills are the link between the three stories. Hospitals tend to recover losses from uninsured patients through the rates they negotiate with private insurers, and those rates show up in employer premiums.23 More uninsured patients put further pressure on rural hospitals that are already struggling, the same places where Medicare Advantage insurers are leaving.2724

The overall direction is clear. Insurers, employers, and the federal government are each pushing costs onto someone else, and those costs are landing on patients and workers. For the people affected, the practical step is the same: read every notice that arrives in the mail, compare plans before December 7, and don't assume that this year's coverage will look the same next year.