UnitedHealth, Humana drop Medicare Advantage plans covering about 1 million seniors

UnitedHealth Group and Humana are shutting down Medicare Advantage plans that together cover about a million seniors, and the insurers are doing it on purpose. Roughly 390,000 people are in UnitedHealth plans that are closing, a company spokesperson told Bloomberg, which first reported the scale of the pullback. Humana has said it will cut plans covering about 600,000. Bloomberg reported that the largest carriers are cutting benefits and dropping offerings to boost profit, after rising medical costs and heightened government scrutiny.

The two giants are only part of the churn. At least 3.8 million enrollees will have to shop for new coverage for 2027, according to a Modern Healthcare analysis of federal data. Of those, about 512,000 people in 14 states need a new carrier altogether because their insurer is leaving their area. The number of counties with no Medicare Advantage plan at all will rise to 181, from 67 this year. The disruption follows a 2026 sign-up period in which nearly 3 million seniors had to find new coverage after losing their plans, according to Johns Hopkins research cited by Healthcare Dive.

The approach is already paying off at the largest carrier. UnitedHealth reported second-quarter net income of $5.48 billion, up 61% from a year earlier, and raised its full-year outlook, Healthcare Finance News reported. Executives said Medicare results exceeded expectations because benefit changes, care-management efforts and adjustments to provider networks helped moderate costs. Those same tools now run through the 2027 plan year.

Aetna, owned by CVS Health, faces a large projected enrollment loss. TD Cowen analyst Ryan Langston estimates it will lose about 950,000 enrollees as it withdraws from two states and operates in 41, Reuters reported. Investment bank Stephens found that every major insurer cut its number of individual plans. Centene dropped about 3,000, Humana about 2,400 and UnitedHealthcare about 690. Centene is also leaving 344 counties.

UnitedHealthcare President Bobby Hunter framed the retreat as unavoidable. "We can't ignore the realities facing the healthcare system," he said, according to Reuters. Insurers have argued that government reimbursement has not kept pace with medical costs, even though the Centers for Medicare & Medicaid Services finalized a 2.48% average payment increase for 2027 worth more than $13 billion.

The plans that survive are narrower and more managed. UnitedHealth will leave areas where preferred provider organizations, which let members see out-of-network doctors and cost more to run, make up a larger share of its business. A spokesperson said 66% of its members will have access to both an HMO and a PPO next year, down from 70%. Aetna is expanding HMOs. Special needs plans, which carry higher per-member margins, continue to grow while standard plans shrink, according to Healthcare Dive's analysis of CMS data. UnitedHealth's own 2027 release puts HMOs and special needs plans at the center of its portfolio.

Benefits are thinner too, despite press releases that stressed preserved "core benefits." A Leerink Partners review of Medicare Plan Finder found dental cuts affecting almost 70% of UnitedHealthcare members. Humana reduced or eliminated its Part B premium giveback for 62% of its members. Across the industry, Leerink analyst Whit Mayo found the average maximum out-of-pocket limit rising 10% and Part D deductibles rising 30%.

Smaller insurers are leaving rather than picking up the slack. At least 11 carriers that sold individual Medicare Advantage plans this year are quitting the program for 2027, compared with seven a year ago, and almost all are owned by health systems, Modern Healthcare found. Molina Healthcare and Providence Health Plan both tried and failed to sell their Medicare businesses before exiting. Wisconsin suspended new enrollment in Aspirus Health Plan this year over customer service, care management and claims processing problems tied to its third-party administrator, UCare, which shut down at the start of the year. Separately, CMS for the first time set hard enrollment caps on 15 regional insurers in 11 states, which limits how many displaced members some local rivals can absorb.

CMS describes 2027 as stable. It says more than 99% of beneficiaries will have at least one plan available, that about 8 in 10 can stay in their current plan at the same or a lower premium, and that insurer projections historically understate enrollment. Insurers project enrollment will fall about 6% to 34 million. KFF puts current enrollment at 35.2 million.

The switching window is already underway. UnitedHealthcare's non-renewal notices are dated Oct. 2, and open enrollment runs Oct. 15 to Dec. 7. The company said its affected members can choose another Medicare Advantage plan through Dec. 31. Those who do not will revert to original Medicare, with a special election period through Feb. 28, 2027, to pick a new plan.