Coverage changes could leave rural markets with fewer choices
About 10% of the Medicare Advantage market was forced to find new plans in 2026. Coverage plans for 2027 will be finalized by Oct. 1.
Older adults could be scrambling for new health coverage next year, especially in rural markets that have fewer insurance choices.
Humana $(HUM)$ has been the first big insurer to spell out its Medicare Advantage plans for 2027, saying it will exit markets and plans covering 600,000 members. That could mark the start of a wave of disruption affecting older adults and their health-insurance options through Medicare Advantage, the private-plan alternative to traditional Medicare.
The exit will affect about 8% of Humana's 7.2 million Medicare Advantage members. The insurer said it expects to recapture about 40% of disrupted seniors through other plans it offers, adding that the move is intended to support its long-term profit-margin goals while trying to retain as many subscribers as possible.
"Sadly, Humana's decision is another sign that Medicare Advantage insurers are prioritizing profit growth over enrollment growth. We expect to hear more from the major insurers in the coming weeks," said Shannon Benton, executive director of the Senior Citizens League, an advocacy group for older adults.
Some smaller plan providers also announced departures. Clear Spring Health said it is exiting the Medicare Advantage market entirely with the discontinuation of its Colorado, Georgia and Illinois businesses. Meanwhile, Presbyterian Health Plan will exit more Medicare Advantage markets in 2027, disrupting about 30,000 subscribers. And Molina Healthcare (MOH) will stop offering Medicare Advantage plans with prescription-drug coverage in 2027.
These announcements come after as much as 10% of the Medicare Advantage market was forced to find new plans in 2026 as insurance companies exited markets, according to an analysis published in February in JAMA, a medical journal published by the American Medical Association. In 12 states, more than 20% of Medicare Advantage enrollees lost their plans in 2026. In Vermont, 92% of Medicare Advantage enrollees were dumped from plans.
In 2026, the average older adult had 32 Medicare Advantage plans with prescription-drug coverage to choose from, according to Jeannie Fuglesten Biniek, deputy director for the program on Medicare policy at KFF, an independent source for health-policy research.
Across all Medicare Advantage plans for individual enrollment, including those with and without prescription-drug coverage, the average Medicare beneficiary could choose from 39 plans in 2026, compared to 42 options in 2025, according to KFF. In rural markets, beneficiaries had fewer choices - such as none in Alaska, one in Vermont, four in South Dakota and three in Wyoming, KFF found. It is still unclear what the choices for 2027 will be.
Exit strategies
Market exits have increased in recent years. From 2018 to 2024, the mean "forced disenrollment rate" for Medicare Advantage beneficiaries was only 1%, which increased to 6.9% in 2025 and to 10% in 2026, according to the JAMA research. Analysts said the rate of market disruptions may have peaked in 2026, but the final plans for 2027 will be released by Oct. 1.
The open-enrollment period for signing up for Medicare coverage runs from Oct. 15 to Dec. 7 each year. During that time, older adults can switch from traditional Medicare to a private Medicare Advantage plan, change from one Medicare Advantage plan to another, and join or change their Medicare Part D prescription-drug plan.
"For seniors, especially those in rural areas, the concern is that insurer exits could mean fewer choices and less competition." Benton said.
The market exits come as insurers have been seeking more profitable growth over subscriber growth at any cost, analysts said. That means leaving certain markets and trimming benefits, rather than chasing subscriber gains. The Centers for Medicare & Medicaid Services recently set a 2.48% average rate increase for 2027, which major insurers said would not cover rising patient-care expenses.
Overall subscriber growth in Medicare Advantage slowed in 2026 as insurers quit unprofitable markets and trimmed benefits. Medicare Advantage plans had about 35.5 million enrollees in 2026, or about 51% of the overall Medicare market. That's up 3.2% from 34.4 million enrollees in 2025, according to data from the Centers for Medicare & Medicaid Services. That growth rate, however, has slowed from more robust annual gains of 7% to 10% a year between 2017 and 2024.
Looking ahead
For 2027, the pace of Medicare Advantage subscriber growth could ease again, but likely not as sharply. Subscriber losses could be offset somewhat by a recent end to a program that kept Medicare drug costs lower. That move may encourage older adults to actually seek out Medicare Advantage to curtail their healthcare costs, analysts said.
"We expect Medicare Advantage enrollment to keep growing in 2027, but at a much slower pace," Benton said. "Insurers seem increasingly focused on controlling costs and improving their bottom lines, rather than simply adding as many members as possible. That could mean they're willing to walk away from markets they don't consider profitable."
For subscribers, losing their Medicare Advantage plan means finding another plan from a different insurer or going to traditional Medicare. However, finding the same doctors, networks and plan coverage may be difficult when shopping for a new plan, analysts said.
"It means fewer choices," said Mary Johnson, an independent Medicare and Social Security analyst. "Because of rising costs, plans are consolidating and [insurers are] closing less profitable plans. Depending on the area where people live, there may be fewer [Medicare Advantage] plans with zero premium, and there may be a high deductible, particularly for prescription drugs."
Johnson recommended that beneficiaries be careful to guard against unsolicited callers claiming to be from insurers. Instead, call the number on the back of your Medicare Advantage insurance card and ask about changes to your coverage, and check your email for notifications as well. Older adults can also check their current enrollment information through their account on Medicare.gov.
"The bottom line for seniors is that 2027 is likely to be a year when beneficiaries need to pay much closer attention to their Annual Notice of Change and the plan choices available in their county," Benton said. "The days when a senior could reasonably assume that the same plan, benefits and network would be there the following year are becoming less certain."
-Jessica Hall
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