Medicare Advantage Plans Exit Hundreds of Counties for 2027

A fall open enrollment unlike recent ones

Medicare's annual enrollment window opened on October 15. This year, millions of older Americans are shopping because they have to, not because they want to. Private insurers are closing Medicare Advantage plans across the country for 2027, and rural areas are taking the worst of it. More than 40 states will lose some plans, and nearly 200 mostly rural counties will be left with no Medicare Advantage option at all31. In the Twin Cities area, roughly a third of Medicare Advantage plans are shutting down31.

The largest insurers are leading the retreat. UnitedHealth Group says about 390,000 members are in plans it is discontinuing. Humana has announced cuts that affect around 600,000 enrollees32. CVS Health's Aetna and Centene are also shrinking their Medicare Advantage footprints32. Humana expects to cover just over 80% of U.S. counties in 2027, down from 85% this year32.

These plan closures are one part of a wider squeeze. Medicare drug coverage, employer insurance, Medicaid eligibility and hospital finances are all under pressure as 2027 approaches.

How many people are affected depends on who is counting

Everyone agrees the pullback is real. The estimates of its size vary widely. Figures cited on NPR put the number of people losing their plans at 4 million to 5 million, with official counts still pending31. Modern Healthcare's review of federal data found at least 3.8 million enrollees who will have to shop for new coverage38. An analysis by Medicare Market Insights, reported by CNN, put the number at nearly 3.2 million, or almost 11% of Medicare Advantage enrollees39. A narrower count of people whose insurer's contract will no longer serve their county comes to about 1.7 million33.

The counts of empty counties also differ. KFF found 193 counties with no Medicare Advantage drug plan open to general enrollment in 2027, up from 123 this year. About 638,000 beneficiaries live in those counties34. Modern Healthcare counted 181 counties with no plans, up from 6738.

The gaps mostly come from definitions. Some counts include every closed plan, even when the same insurer offers a replacement. Others count only full market exits. The direction is the same in every count, though: more people have to make a choice, and fewer choices are left in the places that already had the fewest.

Washington says the market is stable

Federal regulators describe the situation much more calmly. The Centers for Medicare & Medicaid Services (CMS) projects that more than 99% of beneficiaries will have access to at least one Medicare Advantage plan in 2027, and 97% will have at least ten34. CMS expects the average monthly premium to fall from $14.37 to $12, and the total number of plans to drop only slightly, from 5,553 to about 5,53235.

Both views can be true, and the difference between them matters. National averages hide the large differences between counties. KFF found the average beneficiary will have 28 Medicare Advantage drug plans to choose from, down from 32. Some counties will still have dozens, while others will have none46. The steady total also hides a change in what kinds of plans are being sold. Insurers are dropping open-network PPOs and adding Special Needs Plans, which are expected to grow about 9% in 202735. UnitedHealthcare is dropping 34 PPO plans and adding 40 special needs plans. Aetna is cutting 20 PPOs and adding 29 plans for people with chronic conditions.

In other words, the plan count is holding steady because insurers are moving toward narrower networks and target groups that pay better.

Lower premiums, higher costs to use the plans

The falling premium is the least useful number in this story. Insurers are raising cost-sharing, steering members into narrower networks and cutting extra benefits, according to industry experts43. An analysis by Leerink Partners found that many major carriers reduced dental benefits and raised cost-sharing for 202743. The average maximum out-of-pocket limit across Medicare Advantage plans is rising about 9%35. One consultant noted that a $0-premium plan used to be required to compete. Now those plans are either disappearing or offering thinner benefits43.

Insurers explain the cuts by pointing to costs. UnitedHealthcare President Bobby Hunter cited funding pressures, rising medical and drug costs, and higher use of care46. CMS did finalize a 2.48% average payment increase for 2027, worth more than $13 billion. That was much better than the nearly flat 0.09% it proposed in January, but insurers say it still trails their costs32. Government projections based on insurer feedback put 2027 Medicare Advantage enrollment at about 34 million, roughly 6% lower than today41.

My reading is that this is a planned margin reset, not a sudden collapse. Humana's chief financial officer said the company targeted low-return plans instead of cutting evenly, and hopes to win back a large share of affected members43. Humana's exits mostly involve plans rated 3.5 stars or lower39. For seniors, the result is that insurers now decide which counties and which patients are worth covering.

What affected enrollees should do

The deadlines matter. If you pick a new plan by December 7, coverage starts January 1 with no gap36. People whose plans are not renewing get a special enrollment period that runs through February 28, 2027. Coverage chosen after January 1, however, usually starts the following month39. Anyone who does nothing goes back to Original Medicare and loses drug coverage unless they add a separate Part D plan33. People switching to traditional Medicare also have a guaranteed right to buy certain Medigap supplemental policies, but only for 63 days after their old plan ends36.

Drug prices: savings on some drugs, higher costs for others

The Part D drug benefit is changing at the same time. Medicare's second round of negotiated prices takes effect January 1 and covers 15 drugs. The semaglutide drugs Ozempic, Wegovy and Rybelsus drop to $274 for a 30-day supply, down from a $959 list price4. CMS estimates enrollees will save about $685 million in out-of-pocket costs in 20271. CMS also estimates Medicare would have spent about $12 billion less, a 44% saving, if the new prices had applied in 20243.

Other costs are going up. The annual out-of-pocket cap rises from $2,100 to $2,400, and the maximum deductible rises from $615 to $7005. CMS is also ending a temporary premium subsidy for stand-alone drug plans. That subsidy cut premiums by $10 a month per enrollee and capped any plan's yearly increase at $505. There will be no $0-premium stand-alone Part D plans for people outside the Extra Help program, even though 28% of those beneficiaries had one this year6. The negotiated prices are real savings, but they mostly help people who take the selected drugs. Many others will pay more.

The same pressures are hitting employer coverage

The costs insurers cite in Medicare are also driving up job-based coverage. KFF found the average family premium rose 5% this year to $28,30312. Workers' share rose 9% to $7,471, faster than both wages and inflation13. Forecasts for 2027 are worse. Mercer projects an 8.2% increase per employee, the largest since 200317. The Business Group on Health projects 9.2%12, Aon projects 9.5%12, PwC's actuaries project 9%15, and WTW projects 11.1% before plan changes14.

The causes overlap with Medicare's: more use of care, higher hospital prices, expensive specialty drugs, and AI-assisted billing that pushes up claim coding1216. Mercer also cites consolidation among health systems and lower public spending, which shifts costs onto private plans11. Employers plan to respond the same way Medicare Advantage insurers are, by passing costs to members. In WTW's survey, 85% of employers are planning or considering raising employee premium contributions by 202814.

Medicaid changes add pressure on hospitals

Medicaid changes take effect on January 1 as well. Under the 2025 budget law, about 20 million adults in expansion states will have to document 80 hours a month of work, school or volunteering, or earn $580, and renew their eligibility every six months21. Retroactive coverage will also shrink, down to one month in states such as New York28. Research cited by Boston University found that nearly 20% of eligible adults in expansion states may be unable to meet the hours requirement27. Physicians will have to handle the paperwork for medical-frailty exemptions, and safety-net hospitals face weaker finances25.

Put together, these changes point in one direction. Insurers are leaving rural Medicare markets, Medicaid enrollment is likely to fall, and uninsured patients' unpaid bills get shifted onto everyone else's premiums17. Rural and urban hospitals are now closing at similar rates, according to recent research21. Medicare Advantage closures are the most visible sign this fall, but the broader trend is that patients are being asked to pay more of the cost of their care.