Medicare Advantage Insurers Cut Benefits, Raise Costs Amid Elevated Utilization

Medicare Advantage insurers are adjusting their strategies for 2027 amidst elevated costs and utilization. According to a note from Leerink Partners, major players are prioritizing margins by cutting benefits, raising member cost-sharing, withdrawing PPO plans, and limiting broker commissions.

The analysts found that most key players in the Medicare Advantage market have stable footprints overall. However, some companies are slimming down their geographic reach for 2027.

Humana has the largest footprint with 2,694 counties, a 1% increase from last year. UnitedHealthcare follows closely behind, offering plans in 2,534 counties, a 2% decline from its 2026 footprint.

The average out-of-pocket maximum in Medicare Advantage for 2027 will increase by 9.1%, according to the Stephens report. Centene has the highest average OOP increase at 16.1%. Clover Health saw the largest overall increase with a 28.5% rise in average OOP maximums.

UnitedHealthcare is shifting its focus towards HMO plans, which offer more effective care coordination and often lower costs for enrollees. The company aims to have about 95% of Medicare eligibles within its geographic reach have access to an HMO plan with a $0 premium.