Millions Lose Medicare Advantage Plans as Insurers Retreat Amid Reimbursement Rate Drop

Approximately 2.6 million Medicare Advantage enrollees lost coverage at the end of 2025 due to insurer pullbacks driven by a 20% drop in federal reimbursement rates since 2023.

The average beneficiary now has access to 32 plans for 2026, down from 34, though most affected individuals still have alternative options.

UnitedHealth Group Inc. exited 225 counties for 2026 while entering only 14, and Humana Inc. left 198 counties, reducing its service area to 85% of U.S. counties from 89%, and exited three states entirely.

The reduction in plan availability follows a trend where government reimbursement rates fell by roughly 20% from 2023 levels by 2026, while medical costs continued to climb.