Is the rumor real?
Are Medicare Advantage Plans Vanishing? Yes, but it’s not a collapse. Insurers like Humana, CVS/Aetna, and UnitedHealthcare are trimming plans and regions. And trimming them b-i-g BIG!
Becker’s Payer (2025 report) says that Humana alone could lose up to 500,000 members as it trims plans. And Humana's not alone.
“We have made the difficult decision to exit plans that currently serve over 600,000 members, primarily in less managed products such as PPO offerings,” UnitedHealthcare CEO Tim Knoll told investors in July.\
What’s behind the pullback?
The Wall Street Journal noted that the Medicare Advantage retreat isn’t about government underfunding — it’s about insurers’ balance sheets. In 2024, seniors used more medical services than expected, from hospital care to outpatient visits, and those higher costs ate into profits. Hmm...
Investors pushed carriers to stop chasing enrollment numbers and instead focus on profitability. As a result, companies like Humana and CVS/Aetna are trimming unprofitable regions and PPO-style plans, while UnitedHealth is still dealing with losses from expanding too aggressively.
Meanwhile, the KFF (Kaiser Family Foundation) analysis shows that Medicare Advantage payments from the federal government are still increasing — projected at about a 5% bump in 2026. But that growth is slower than the pace of rising medical costs, especially with higher use of hospital services and specialty drugs. Insurers argue the math simply doesn’t work unless they cut back on plan offerings.
So...
So the pullback isn’t a signal that Medicare Advantage is crumbling. Instead, it’s a "recalibration": government reimbursements are going up, but not fast enough to cover a surge in patient care costs, and insurers are pruning their portfolios to keep Wall Street happy.
Disclaimer: This article is for informational purposes only and is not a substitute for professional advice.
