143. Medicare Advantage Retrenchment Is Not Over — 2027 Could Bring Another Tough Year.

How did we get here? The problems really emerged in 2024 when medical utilization increased far beyond what some insurers anticipated.

Seniors returned for procedures and services at higher rates following the pandemic.

Outpatient utilization, orthopedic procedures, supplemental benefits, behavioral health and prescription drug costs all created pressure.

Humana and CVS were among the companies forced to reduce earnings expectations as medical costs accelerated.

According to KFF, industry-wide Medicare Advantage gross margins averaged $1,655 per enrollee in 2024, 17% below 2023.

But 2024 was still relatively stable from a member disruption standpoint.

A recent JAMA analysis found that from 2018 through 2024, an average of only about 1% of MA HMO and PPO members annually were forced from their existing plans because of contract terminations or service area reductions.

Then came 2025.

Plans began acting aggressively to restore profitability.

Humana ultimately shed roughly 550,000 MA members through plan and marketing changes.

CVS and Aetna pursued a margins over membership strategy with overall membership reductions exceeding 1 million.

Centene lost approximately 200,000 Medicare Advantage members following the 2025 enrollment period.

and forced MA disenrollment jumped from the historical average of roughly 1% to 6.9% in 2025.

Then came 2026, and retrenchment got even bigger.

The same JAMA researchers estimate that approximately 10% of MA, HMO, and PPO beneficiaries, about 2.9 million people, were forced to change coverage for 2026 because their existing plan left their market.

Among non-SNP members, the rate reached 12.4%.

KFF separately identified 2.6 million beneficiaries enrolled in plans that terminated at the end of 2025.

Importantly, almost 99% still had another MAPD option available, and 68.7% had another plan from their existing insurer available.

So contraction did not mean the disappearance of Medicare Advantage Choice, but it absolutely meant considerable disruption for beneficiaries.

Put those three years together, 2024 was the warning 2025 was the beginning of the major retrenchment 2026 was the extraordinary contraction and now we are heading into 2027 the retrenchment isn't over with that let's take our first break when we come back we're going to talk about the more than 1 million medicare advantage members already in the 2027 crosshairs and why the cuts keep coming be right back

How did we get here? The problems really emerged in 2024 when medical utilization increased far beyond what some insurers anticipated.

Seniors returned for procedures and services at higher rates following the pandemic.

Outpatient utilization, orthopedic procedures, supplemental benefits, behavioral health and prescription drug costs all created pressure.

Humana and CVS were among the companies forced to reduce earnings expectations as medical costs accelerated.

According to KFF, industry-wide Medicare Advantage gross margins averaged $1,655 per enrollee in 2024, 17% below 2023.

But 2024 was still relatively stable from a member disruption standpoint.

A recent JAMA analysis found that from 2018 through 2024, an average of only about 1% of MA HMO and PPO members annually were forced from their existing plans because of contract terminations or service area reductions.

Then came 2025.

Plans began acting aggressively to restore profitability.

Humana ultimately shed roughly 550,000 MA members through plan and marketing changes.

CVS and Aetna pursued a margins over membership strategy with overall membership reductions exceeding 1 million.

Centene lost approximately 200,000 Medicare Advantage members following the 2025 enrollment period.

and forced MA disenrollment jumped from the historical average of roughly 1% to 6.9% in 2025.

Then came 2026, and retrenchment got even bigger.

The same JAMA researchers estimate that approximately 10% of MA, HMO, and PPO beneficiaries, about 2.9 million people, were forced to change coverage for 2026 because their existing plan left their market.

Among non-SNP members, the rate reached 12.4%.

KFF separately identified 2.6 million beneficiaries enrolled in plans that terminated at the end of 2025.

Importantly, almost 99% still had another MAPD option available, and 68.7% had another plan from their existing insurer available.

So contraction did not mean the disappearance of Medicare Advantage Choice, but it absolutely meant considerable disruption for beneficiaries.

Put those three years together, 2024 was the warning 2025 was the beginning of the major retrenchment 2026 was the extraordinary contraction and now we are heading into 2027 the retrenchment isn't over with that let's take our first break when we come back we're going to talk about the more than 1 million medicare advantage members already in the 2027 crosshairs and why the cuts keep coming be right back