Major US health insurers are reducing Medicare Advantage plans for 2027 as medical expenses rise and companies try to restore profit margins. Some older Americans will need to find new coverage or adjust to narrower networks and higher out-of-pocket costs, even as federal projections show average monthly premiums declining.
UnitedHealth Group (NYSE: UNH), Humana (NYSE: HUM), CVS Health (NYSE: CVS) and other insurers are changing their Medicare Advantage offerings ahead of the next coverage year. The adjustments include eliminating plans, leaving some counties and reducing the availability of certain benefits.
The Financial Times reported that major insurers are cutting benefits or increasing costs for older Americans as they work to improve profitability. Some enrollees face higher prescription drug copayments and out-of-pocket expenses, while certain plans are reducing supplemental benefits such as hearing-aid allowances.
Medicare Advantage is the privately administered alternative to Original Medicare. Insurers receive government payments to provide Medicare-covered healthcare, with many plans also offering additional benefits. Rising medical utilization and pressure on reimbursement have made the business more challenging, prompting companies to reconsider which plans and markets they serve.
The trend follows earlier changes to UnitedHealthcare and Aetna's Medicare Advantage networks for 2027. Narrower networks can limit the doctors and hospitals available to members, even when a plan remains active.
Why Insurers Are Dropping Medicare Advantage Plans
Insurers are reducing offerings after years of medical expenses coming in higher than anticipated. The pullback is designed in part to improve margins, rather than simply expand membership.
A Healthcare Dive analysis of federal plan data found that every major publicly traded Medicare Advantage insurer it examined was reducing the number of individual plans available for 2027. UnitedHealthcare planned to remove about 690 plans, while Humana was cutting approximately 2,400. Centene was reducing its unique plan offerings by roughly 3,000.
The geographic changes are also significant. Centene is withdrawing from 344 counties for 2027, while CVS Health and UnitedHealthcare are leaving 103 and 63 counties, respectively, for their traditional Medicare Advantage offerings. Elevance Health (NYSE: ELV) is exiting 56 counties, the analysis found. Humana is adding 39 counties despite reducing its overall plan count, underscoring that plan reductions and geographic exits are not the same thing.
Smaller and regional providers are also retreating. Memorial Hermann Health Plan, for example, is ending its Medicare Advantage offering on December 31, 2026. Members must select alternative coverage for 2027.
The changes do not mean Medicare Advantage is disappearing nationally. The Centers for Medicare & Medicaid Services (CMS) expects the total number of plans to edge down from 5,553 in 2026 to about 5,532 in 2027. However, national totals can hide substantial changes in individual counties and plan designs.
Costs are also shifting within plans that remain available. The Wall Street Journal reported that some beneficiaries will encounter higher deductibles, copayments or maximum out-of-pocket limits, while some plans are reducing supplemental benefits. The details vary by insurer, plan and location; not every Medicare Advantage member will face all of these changes.
What Medicare Beneficiaries Need to Check Before December 7
Medicare's annual open-enrollment period runs from October 15 through December 7, 2026. Beneficiaries can use this window to compare coverage for 2027, switch Medicare Advantage plans, change prescription drug coverage or move between Medicare Advantage and Original Medicare.
CMS projects that the weighted-average monthly Medicare Advantage premium will fall 16.5%, from $14.37 in 2026 to $12 in 2027. It also expects more than 99% of Medicare beneficiaries to have access to at least one Medicare Advantage plan and 97% to have at least 10 choices. The agency's 2027 Medicare Advantage and prescription drug program outlook describes the national projections.
Those averages do not guarantee that an individual's costs will fall. A beneficiary could pay a lower monthly premium but face higher copayments, a different drug deductible or a new limit on out-of-network care. The projected decline in average Medicare Advantage premiums therefore needs to be considered alongside each plan's full terms.
Prescription drug coverage deserves particular attention. For 2027, the standard Medicare Part D deductible is scheduled to rise from $615 to $700, while the annual out-of-pocket threshold increases from $2,100 to $2,400. Those are changes to the standard Part D benefit parameters, not universal charges that every enrollee will pay.
Members should review their insurer's annual notice of changes and compare the full cost of coverage, including premiums, deductibles, prescription copayments and the maximum amount they could owe for covered services. They should also verify that their current doctors, hospitals and medications remain covered under the plan they are considering.
Healthcare costs can place additional pressure on retirement budgets. Some beneficiaries also pay income-related surcharges on Medicare Part B and Part D premiums, which can increase monthly expenses beyond the price of an insurance plan. The rules for those charges differ from Medicare Advantage pricing, as explained in the details on income-related Medicare premium surcharges.
Retirees relying on fixed incomes may have limited room to absorb higher medical bills, even when Social Security benefits increase. The final amount they keep depends partly on deductions and expenses, a concern also relevant to the 2027 Social Security cost-of-living adjustment.
Beneficiaries can compare available plans through the official Medicare Plan Finder. The most suitable option will depend on an individual's doctors, medications, healthcare needs and budget. With the enrollment deadline approaching on December 7, relying on a plan's monthly premium alone could leave important coverage changes unnoticed.