Medicare Advantage Shake-Up: UnitedHealth and Humana Retreat from Key Markets

Two major players in the Medicare Advantage market are retreating from certain areas ahead of the 2027 enrollment year. UnitedHealth Group and Humana are discontinuing their plans in markets that they say are no longer financially sustainable.

The moves affect over a million seniors, with approximately 390,000 members enrolled in discontinued UnitedHealth plans and around 600,000 enrollees impacted by Humana's cuts. Affected individuals will receive information on their options for the 2027 plan year, including other Medicare Advantage plans, Medicare supplement insurance, and Medicare Part D drug coverage.

UnitedHealth Group cited rising medical costs, higher drug prices, and increased utilization as driving factors behind their decision to pull back from certain markets. The company is specifically withdrawing from areas where preferred provider organization plans make up a larger share of offerings, as these plans allow members to seek care outside a network at higher operating costs for insurers.

The Medicare landscape is shrinking, with 2027 enrollment projected to be roughly 6% fewer than today's levels. The Centers for Medicare and Medicaid Services finalized a 2.48% average payment rate increase for Medicare Advantage plans in 2027, amounting to more than $13 billion in additional payments.